In Hawaiʻi, tourism is the largest single source of private capital, according to the Hawaiʻi Tourism Authority, resulting in more than 17.75 billion in visitor spending each year.
While opening a small business in this tourism sector can be extremely lucrative, it also poses certain risks. Small business insurance gives business owners the best protection against unforeseen losses.
Let’s take a closer look at what types of insurance are recommended for small businesses in the tourism industry and how to reduce the impact of business liabilities.
What Business Insurance Policies Are Required in Hawaiʻi?
Small businesses in Hawaiʻi are required by state law to carry certain types of business insurance. These policies are required on each of the islands and include:
Workers’ Compensation Insurance
Workers’ compensation insurance gives both part-time and full-time employees wage, medical, and other financial benefits if they become ill or injured while on the job. Any small business that has one or more employees is required to carry workers’ compensation insurance.
In addition to covering the cost of medical treatment for work-related illnesses and injuries, workers’ comp may also provide disability benefits while the ill or injured employee is recovering and unable to return to work.
Commercial Auto Insurance
Commercial auto insurance is required by any small business owner that has a business-owned vehicle. With commercial auto insurance, small business owners can protect their vans, trucks, and cars from physical damage and liability issues.
A commercial auto insurance policy can cover the business owner, employees, and other drivers. The type and amount of coverage depend on the policy chosen but may include bodily injury liability, property damage liability, medical payments, collision coverage, and uninsured motorist coverage.
What Other Business Insurance Policies are Recommended?
Running a business in the tourism industry can be exciting, but there are several real concerns that small business owners in Hawaiʻi must consider. Economic downturns, political unrest, natural disasters, and other risks can hit the tourism industry hard.
To protect against these and other issues, small business owners in the tourism industry should consider the following insurance policies:
Commercial Property Insurance: Many small businesses own equipment and supplies that would result in a major expense if damaged or stolen. Commercial property insurance protects businesses from theft, fire, natural disasters and similar covered perils. It is recommended to insure the physical building, office equipment, inventory, records, fencing, landscaping, and costly equipment.- Cyber Liability Insurance: With the increase in identity theft and data breaches, it is more important than ever for small businesses to carry cyber liability insurance. Cyber liability insurance covers a wide range of situations that a company in the tourism sector may encounter while doing business, from minor cybercrimes to cyber extortion.
- Commercial General Liability Insurance: When serving the public, lawsuits against the company are not uncommon. Commercial general liability insurance (GLI) is a policy that provides businesses with coverage for bodily injury, property damage, and personal injury caused by a business’s products or operations. While not mandatory in Hawaiʻi, it is highly recommended for all businesses.
- Professional Liability Insurance: Professional liability insurance protects businesses when employees make mistakes that affect their customers. Also referred to as errors and omissions (E&O) insurance, this prevents businesses from suffering major financial losses if they are held liable for mistakes. These mistakes include negligence, inaccurate advice, misrepresentation, and copyright infringement.
What to Consider When Purchasing Small Business Coverage
To stay competitive in the active tourism industry of Hawaiʻi, it is important to know how to protect against risks. Keep the following in mind:
First, consider those policies that are required by the state or localities. Other requirements may occur by project, or as part of a lease agreement. Small business owners should always assess all of their business risks. This should include the geographical location and scale of the business.
An experienced insurance advisor can provide insight about specific risks to create a policy that is tailored for effective coverage. Cost is also a major factor when comparing insurance policies. Establish a budget and carefully evaluate insurance quotes to determine if the coverage fits the company’s budget.
Review the policy’s list of exclusions and limitations to ensure the business is properly covered from common risks that may arise during day-to-day operations.
Trust Atlas Insurance Agency for Small Business Insurance Coverage
With the right insurance policies from Atlas Insurance Agency, small businesses in the Hawaiʻi tourism industry can stay protected from a range of risks and liabilities.
Request an insurance quote today or call Atlas at (808) 400-6634.