Hawaii business insurance requirements

Hawaii layers three employer mandates: workers' compensation from the first employee, temporary disability insurance for off-the-job injuries and illness, and the Prepaid Health Care Act, which requires health coverage for most employees working 20 hours a week. Auto minimums doubled to 40/80/20 on January 1, 2026. The property market has its own residual pool for lava zones and condominiums.

Workers' compensation requirements

The Disability Compensation Division (DCD) states the rule plainly: any employer "having one or more employees, full-time or part-time, permanent or temporary" must provide workers' compensation, unless the work is excluded by HRS 386-1 (DCD). Employers may not make workers contribute to comp premiums.

Hawaii handles owners through the definition of employment rather than an election form. Excluded service includes a sole proprietor, an individual partner, an LLC member with a distributional interest of 50% or more, an individual who owns at least 50% of a corporation, and an unpaid officer owning 25% or more of a corporation that has no employees. The statute adds that no employer may require a worker to incorporate, form an LLC or become a partner as a condition of employment. Household work paid less than $225 a quarter, commission-only real estate agents, and volunteers for nonprofits are also outside the law. So, for example, a salaried officer who owns 30% of the company is covered. See can owners and officers exclude themselves from workers' comp?.

The penalty in 386-123 is the greater of $500 or $100 for each employee for every day the failure continues. The director may waive the amount above $500 once the employer complies, and an employer in default for 14 days can be enjoined from doing business anywhere in the state. An employer must report a work injury on Form WC-1 within seven working days.

Hawaii has no state fund. The legislature created the Hawaii Employers' Mutual Insurance Company in 1996 as an independent domestic mutual that "shall not be an agency of the State"; it writes workers' comp, employers' liability and related federal and maritime comp coverage, and no other lines. A 2007 legislative resolution records that assigned risk coverage was discontinued on December 31, 1996, with the expectation that HEMIC would cover employers unable to buy in the voluntary market (HCR 179). NCCI files advisory loss costs; it proposed a 4.4% decrease effective January 1, 2026 (NCCI summary). The 2026 maximum weekly comp benefit is $1,240. More in workers' compensation insurance: how it works.

Disability and paid leave mandates

Hawaii is one of a handful of statutory disability states. The TDI law, enacted in 1969, requires employers to provide partial wage replacement for off-the-job injury or sickness, including pregnancy. Employees qualify with 14 weeks of Hawaii employment, each with at least 20 paid hours, and at least $400 in wages in the 52 weeks before the disability. Employers comply by buying an insured plan, running an approved self-insured plan, or through a collective bargaining agreement with equal or better sick leave. A statutory plan pays 58% of average weekly wages from the eighth day of disability for up to 26 weeks.

For 2026 the maximum weekly benefit is $871, and an employer may withhold no more than half the cost, capped at 0.5% of weekly wages or $7.50 a week (DCD 2026 figures). The rest of the premium is yours.

The Prepaid Health Care Act of 1974 is the other mandate. Employers must provide approved health coverage to employees who work at least 20 hours a week and earn at least 86.67 times the minimum wage a month ($1,387 in 2026), starting after four consecutive weeks of employment. The employer pays at least half the premium, and the employee's share may not exceed 1.5% of wages. Hawaii has no paid family leave insurance program. See state disability and paid family leave programs: every mandate in 2026 and group short- and long-term disability insurance for employers.

Commercial auto requirements

For policies effective on or after January 1, 2026, the minimums are $40,000 per person and $80,000 per accident for bodily injury and $20,000 for property damage, double the old 20/40/10, plus $10,000 of personal injury protection (Insurance Division FAQ; HRS 431:10C-301). Insurers must also offer uninsured and underinsured motorist coverage, which can be rejected only in writing. The Division says doubling limits may raise premiums about 25% on average for many drivers. Check that every vehicle on a fleet schedule renewed at the new limits; see commercial auto insurance: what it covers and what it leaves out and, for interstate carriers, FMCSA insurance requirements and filings for motor carriers.

The business insurance market in Hawaii

The Hawaii Property Insurance Association exists to make basic property insurance available where authorized insurers will not write it; authorized property-casualty insurers, other than auto-only writers, must be members and share its results. Its eligible areas are lava zones 1 and 2, designated by the commissioner (431:21-107), and the statute now covers residential condominium associations too; its plan of operation must cap how long a high-rise condominium can stay insured there at no more than 60 months (431:21-105). Condo boards shopping a renewal should know that clock exists; see Condo and HOA insurance and FAIR Plans and residual markets for commercial property.

Wind is the other exposure. On September 25, 2026 the Insurance Commissioner allowed nonresident adjusters to work temporarily on claims from Hurricane Lala, Hurricane Lowell and Tropical Storm/Hurricane Nolo (Declaration 2026-4LIC). Read the hurricane deductible on any property quote. Flood is excluded from standard forms; NFIP commercial policies top out at $500,000 for the building and $500,000 for contents, and the program is authorized only through December 11, 2026 (FEMA).

Surplus lines brokers pay 4.68% of gross premiums, less return premiums, within 45 days after each quarter; broker-added fees are not part of taxable premium (HRS 431:8-315). See surplus lines taxes, stamping fees and diligent search.

Liability law that affects premiums

Hawaii uses modified comparative negligence. Under HRS 663-31, a plaintiff recovers if their negligence "was not greater than" the combined negligence of the defendants, with damages reduced by their share; at 51% they recover nothing. Actions for damage or injury to persons or property must be filed within two years (657-7), and contract actions within six (657-1).

Where to get help

• Hawaii Insurance Division (cca.hawaii.gov/ins): 1-844-808-3222, 335 Merchant Street, Room 213, Honolulu. The Division asks consumers to speak with an investigator before filing a complaint, then accepts complaints online.
• Disability Compensation Division (labor.hawaii.gov/dcd): 808-586-9151; WC insurance section 808-586-9185; TDI and Prepaid Health Care plans 808-586-9188; complaints and investigations 808-586-9200. District offices in Hilo, Kealakekua, Wailuku and Lihue.

Confirm your obligations with DCD or a licensed broker, and compare states with the workers' comp and benefits requirements by state.