The email arrives on a Tuesday afternoon. It is from a mainland law firm, on behalf of a brand you have never heard of, claiming that your product name infringes on their registered trademark. They are asking you to cease use within thirty days and to account for past sales.
Or it is a different Tuesday, and the email is from a customer’s attorney. A child swallowed a piece of one of your products. The hospital visit was serious. The attorney is asking what your liability coverage looks like.
These are the moments product founders in Hawaiʻi rarely plan for, because general business insurance feels like enough until it isn’t. The two coverages that respond when these moments arrive are product liability insurance and intellectual property insurance, and most Hawaiʻi product brands have neither, or have versions of each that do not actually do what the founder thinks they do.
The Made in Hawaiʻi Brand Is Worth Protecting
The Made in Hawaiʻi label carries real commercial weight. The recent Brand Development Plan from the Hawaiʻi Department of Business, Economic Development, and Tourism documented that nearly three in four U.S. visitors to Hawaiʻi agree the Made in Hawaiʻi mark adds value to a product, and the plan projects demand for products carrying the seal could grow significantly with proper support. At the same time, the plan flagged ongoing concerns about mainland and overseas products falsely claiming Hawaiʻi origin, which dilutes the value of the label for legitimate local producers.
For a Kauaʻi-based skincare founder shipping nationally through Shopify, a Big Island coffee roaster selling to Mainland wholesalers, or a Honolulu apparel brand growing from farmers markets into hotel retail, the brand identity is the asset. Protecting it is not a marketing exercise. It is a coverage decision.
What Product Liability Insurance Covers
Product liability insurance responds when something a business made, distributed, or sold causes bodily injury or property damage to a third party. The claims fall into three broad categories.
- The first is manufacturing defects: something went wrong in production. A batch of skincare contained a contaminant. A piece of jewelry had a sharp edge that should have been smoothed. A food product was packaged with an allergen that was not on the label.
- The second is design defects: the product itself, even when made correctly, carries an unreasonable risk. A children’s toy includes parts small enough to be a choking hazard. A piece of furniture tips over under foreseeable use.
- The third is marketing or warning defects: the product was not accompanied by adequate instructions or warnings. A topical product did not warn about sun sensitivity. A consumable did not flag a common allergen.
In all three categories, the coverage responds to defense costs, settlements, and judgments. For a Hawaiʻi product brand selling outside the islands, the coverage also matters because litigation can be brought in the jurisdiction where the harm occurred, which often means defending a claim in an unfamiliar mainland court.
The premium on product liability scales with the type of product, the volume of sales, the distribution footprint, and the claims history of the category. Skincare, food, and supplements generally rate higher than apparel or printed goods. E-commerce distribution that ships to all fifty states generally rates higher than local retail or farmers market sales. None of those rating factors is something a founder can control after the fact, which is why the coverage conversation should happen before scale, not after a claim.
What Product Liability Insurance Does Not Cover
Two assumptions get founders into trouble.
The first is the assumption that general liability covers product claims. Most commercial general liability policies do include some product coverage, often called products-completed operations coverage. The limits and exclusions matter. A general liability policy with a $1 million limit may sound adequate until a single product claim involving a serious injury reaches a settlement that exhausts the limit and leaves the business exposed for the rest.
The second is the assumption that product liability covers recall costs. It does not. Product recall coverage is a separate policy that responds to the costs of pulling a product from shelves, notifying customers, handling returns, and managing the public communication around the recall. For food and beverage producers, cosmetics makers, and any business whose product could realistically be subject to a recall, the recall policy is the gap most founders do not know they have.
Worker injuries also sit outside product liability. An employee hurt during production, packaging, or fulfillment is covered by workers’ compensation, not by the product liability policy. Hawaiʻi law requires workers’ compensation for businesses meeting the employee threshold, and the Department of Labor and Industrial Relations is the authoritative source on current requirements.
What Intellectual Property Insurance Covers
Intellectual property insurance is the coverage that responds when someone alleges your brand has infringed on their trademark, copyright, or, in some forms, patent. It can also respond when you need to enforce your own rights against someone infringing on your brand.
There are two sides to IP insurance, and most product founders need to think about both.
- Defense coverage, sometimes called IP infringement defense, responds when a third party claims your business has infringed on their intellectual property. The mainland law firm email scenario falls here. The coverage pays for defense costs and, depending on policy structure, settlements or judgments. For a Hawaiʻi brand using imagery, design elements, or naming conventions tied to the language and culture of Hawaiʻi, the risk of an inadvertent infringement claim, whether legitimate or opportunistic, is real.
- Enforcement coverage, sometimes called IP abatement, responds when your business needs to pursue someone infringing on your registered trademark, copyright, or trade dress. For a Made in Hawaiʻi brand watching a mainland operation use a confusingly similar name on a competing product, enforcement coverage is what makes pursuing the claim financially viable. Without it, the cost of litigation often outweighs the recoverable damages, and the infringer wins by default.
The coverage is most relevant for brands that have invested in formal IP protection: registered trademarks, registered copyrights, or documented trade dress. A product brand that has not registered its trademark has less to insure and less to enforce. For founders growing into wholesale, e-commerce, or mainland distribution, registration is typically the first step. Coverage follows.
Where the Two Coverages Intersect for Made in Hawaiʻi Brands
For most Hawaiʻi product brands, the conversation about product liability and IP insurance happens together because the same business event often triggers both exposures.
A new product launch creates fresh product liability exposure and, if the product carries new branding or design elements, fresh IP exposure. A move from local retail to e-commerce expands the geographic footprint of both. A wholesale relationship with a mainland retailer can shift product liability responsibility under indemnity clauses while also creating new pathways for IP claims to surface in unfamiliar jurisdictions.
The broker conversation that serves a growing Hawaiʻi brand starts with the same set of questions for both coverages. What are you selling, in what volume, to which markets, through which channels, under what brand assets, and with what existing protection on the brand itself? The answers shape the policy structure.
Contact Local Insurance Brokers to Protect Your Made in Hawaiʻi Brand
If you are running a product brand in Hawaiʻi and the only insurance you carry is general liability, the next conversation with a broker should cover three things. The first is your current general liability policy’s products-completed operations coverage, including the limit and any exclusions that affect your specific product category. The second is whether a standalone product liability policy, a higher limit, or both make sense given your sales volume and distribution footprint. The third is whether your brand assets are registered, and if so, what IP coverage structure matches the way you actually use them.
The team at Atlas Insurance has worked with Hawaiʻi product founders across the islands for nearly a century, from the apparel brands shipping out of Honolulu warehouses to the food and beverage producers selling into mainland accounts. If your brand is growing into markets and exposures your current coverage was not built for, contact Atlas before the next product launch or the next wholesale order.