Every organization can benefit from having business insurance policies. According to the U.S. Small Business Administration, in 2023, 99.2% of Hawaiʻi businesses are categorized as small businesses that employ approximately 48.7% of the workforce.
Employers who acquire the right business policies can help protect their workforce, safeguard their investment, and avoid costly legal fees in an unexpected incident.
In Hawaiʻi, two types of business policies are required by law; however, many other business policies can greatly benefit business owners, particularly small businesses in Hawaiʻi.
Which Business Insurance Policies are Mandatory in Hawaiʻi ?
Starting a business means following specific requirements according to the federal and state governments. This includes business insurance for the protection of the business, the employees, and the community in which they operate. On every island in Hawaiʻi, business owners are required to have the following policies:
Workers’ Compensation Insurance
Hawaiʻi state law requires all businesses that have one or more employees, both part-time and full-time, to carry workers’ compensation insurance. Workers’ compensation insurance provides businesses with medical and wage benefits for employees who become ill or injured at work.
A standard workers’ compensation insurance policy covers the cost of medical treatment for work-related illnesses or injuries. It also offers disability benefits if the ill or injured employee is recovering and unable to return to work.
Workers’ compensation insurance is considered a form of social insurance as it is essentially a contract between labor and management, where in exchange for buying a workers’ compensation insurance policy, business owners are protected from civil lawsuits if their employees become injured or ill on the job.
Commercial Auto Insurance
In Hawaiʻi, businesses must also obtain a commercial auto insurance policy for all business-owned vehicles. This type of policy helps cover the cost of work vehicle accidents.
Commercial auto insurance covers comprehensive physical damage loss to business vehicles, liability damages, and collision. It may also cover medical expenses for injured occupants of business vehicles and injury sustained by occupants.
Hawaiʻiʻs minimum requirements for auto liability insurance:
- $10,000 per person for personal injury protection
- $10,000 per occurrence for property damage liability
- $20,000 per person for bodily injury liability
- $40,000 per accident for bodily injury liability
What Business Policies are Recommended in Hawaiʻi ?
While some types of business policies available to business owners are not mandatory by law, they can be highly advantageous for growing businesses, particularly in Hawaiʻi.
The following business policies are recommended:
1. Business Owners Policy Insurance
A business owners policy (BOP) protects businesses from liability claims and lawsuits. It can also safeguard a business’s buildings, inventory and equipment, and provide financial protection if the business is forced to shut down unexpectedly due to a covered loss. A business owner’s policy consists of two types of coverage: commercial general liability insurance and commercial property insurance.
2. Commercial Property Insurance
Whether a business owner owns the building they use, leases a commercial space, or works from home, commercial property insurance is necessary. Commercial property insurance protects the business’s physical assets from theft, vandalism, fire, burst pipes, explosions, storms, and more. However, floods and earthquakes are generally not covered by commercial property insurance but can be covered by an add-on policy.
A commercial property Insurance policy will typically cover the building, everything in it, and everything just outside of it, including:
- Furniture
- Equipment
- Computers
- Fencing and landscaping
- Exterior signs
- Inventory
- Important documents
- Property of others
3. Commercial Casualty Insurance
Commercial casualty insurance is a broad type of business insurance that addresses a range of losses, including damage to property and injuries to people. Common examples of casualty insurance include cyber liability coverage, directors & officers insurance, employment practices coverage, and errors & omissions insurance.
Liability is the key issue concerning commercial casualty insurance policies. This means the commercial casualty insurance policy will help protect a business if the employer, an employee, or the business as a whole is determined to be liable in the course of doing business.
4. Commercial Umbrella Insurance
Commercial umbrella insurance provides business owners with an additional layer of liability protection that extends from other liability coverage limits. A commercial umbrella policy typically covers the same costs as business liability insurance, such as attorney fees and medical expenses, if the company faces a lawsuit.
Umbrella insurance can provide business owners with additional coverage for the following:
- Third-party property damage
- Slip-and-fall injuries
- Employee injury lawsuits
- Car accident liability
When starting a business, just meeting the minimum requirements can leave you and your employees vulnerable to serious damages. In Hawaiʻi, if you partner with an established local insurance provider you can benefit from a policy tailored to your specific business needs.
Get the Business Policies You Need from Atlas
For more than 90 years, Atlas Insurance Agency has been serving the insurance needs of local businesses. Our partnerships with the area’s leading insurance carriers help us deliver quality and affordable insurance products and services to businesses across Hawaiʻi.
For more information about our business insurance policies or to request a quote, contact Atlas Insurance Agency today.