Insurance Essentials for Hawaiʻi Restaurants: A Practical Guide for Local Restaurant Owners
Reading Time: 4 - 5 Minutes
Key Takeaways
Workers’ compensation insurance is required in Hawaiʻi if you have one or more employees. The state can impose penalties, and a court may stop operations due to certain instances of noncompliance [1].
Liquor liability insurance of at least $1,000,000 is required for alcohol sales and service businesses (except for certain minimarts) [5].
For business-owned vehicles, Hawaiʻi’s required minimum insurance liability limits are: Bodily Injury of $40,000 each person / $80,000 each accident and Property Damage of $20,000 each accident, with $10,000 Personal Injury Protection (PIP) each person for new and renewal policies effective Jan 1, 2026 [9,10].
Flood is not covered by standard property insurance. It must be purchased separately from the National Flood Insurance Program (NFIP) or an insurer offering private flood policies [13,14].
General liability insurance covers common third-party claims.
Property and business interruption insurance coverages/limits should reflect higher local rebuild costs and operating expenses in Hawaiʻi [11,12].
Disclaimer: This guide shares general information for Hawaiʻi restaurants. It does not create coverage, guarantees, or legal advice. Coverage terms, limits, conditions, and availability vary by policy and carrier. Always read your policy and consult your agent and, when needed, legal counsel. For statutory or county requirements, refer to the current versions of the laws and rules cited below.
Opening a restaurant in Hawaiʻi means more than perfecting your menu. It means navigating state insurance requirements while protecting your business from the everyday risks that come with serving customers. Whether you're running a plate lunch spot in Kaimuki or welcoming visitors to a fine‑dining spot in Waikīkī, having the right coverage isn’t optional, it’s the foundation that keeps your dream secure.
If you’re planning to open a restaurant in Hawaiʻi or are just getting started, this guide will walk you through the essential commercial insurance policies every local owner should know about.
Required Coverages in Hawaiʻi
Workers’ Compensation: If you employ one or more employees (fulltime, parttime, or temporary), you must secure workers’ compensation insurance by buying a policy [2,3].
More about workers’ compensation: Hawai'i Employer’s Guide to Navigating Workers’ Compensation Claims - Island Insurance
Liquor Liability: In Hawaiʻi, businesses that sell, serve, manufacture, distribute, or supply alcoholic beverages are required by the state to have a liquor license and maintain liquor liability insurance coverage (unless exempt) of at least $1,000,000 [5]. Without proof of applicable insurance, the liquor commission will not renew your license [4, 6-8].
Commercial Auto: If you own or lease vehicles for business use, you must carry liability and personal injury protection (PIP) insurance. As of January 1, 2026, the minimum coverage limits in Hawaiʻi are $40,000 each person / $80,000 each accident for Bodily Injury, $20,000 each accident for Property Damage, and $10,000 each person for PIP [9,10]. Businesses may choose higher limits due to other requirements and given local medical and repair costs [9]. Consult with your local insurance agent to find the right coverage amounts for your unique needs.
Also read: Essential Insurance Policies Every Hawai'i Business Owner Should Consider - Island Insurance
Other Important Commercial Insurance Coverages
General Liability: Protects you and your business against liability for a third party’s bodily injury, property damage, and personal or advertising injury, including defense costs (occurrence forms) [11].
Property and Business Interruption: Covers direct physical loss of or damage (for example, fire or theft) to your property. Add business interruption coverage to help with lost income and ongoing expenses during a covered shutdown. In Hawaiʻi, set limits to match higher local rebuild costs driven by shipping and labor constraints and greater ongoing operating expenses [12].
Flood: Standard property policies typically do not cover losses from a flood. Consider a separate NFIP or private flood policy, especially in coastal or heavy rain areas [13,14].
Equipment Breakdown with Spoilage: Equipment breakdown coverage can help with mechanical, electrical, or pressure systems breakdown that could affect cooking equipment, refrigeration and other expensive equipment used to run a restaurant. Many endorsements include spoilage and business interruption features. Confirm that your spoilage limit matches typical inventory on hand, and there are back-up plans in place to mitigate spoilage losses.
Cyber: If you accept credit cards or store customer data, cyber liability insurance can help to cover breach response (notices, credit monitoring, forensics, legal costs, etc.). Hawaiʻi law requires that breach notices be sent to all potentially impacted parties without any unreasonable delay [15].
Employment Practices Liability (EPL): EPL insurance helps with claims of harassment, discrimination, or wrongful termination of employees, which are typically not covered under general liability policies [11].
Whether you’re just starting out or opening your doors soon, commercial insurance coverage is essential for any Hawaiʻi restaurant.
To learn more about your business’ coverage options, contact a local insurance agent today.
Frequently Asked Questions
At minimum: Workers’ compensation if you have one or more employees, commercial auto (liability and PIP) for business owned or leased vehicles, and businesses that sell, serve, manufacture, distribute, or supply alcoholic beverages are required by the state to have a liquor license and maintain liquor liability insurance coverage. The landlord of your business most likely will require you to have general liability insurance.
As of January 1, 2026, the minimum coverage limits in Hawaiʻi are $40,000 each person / $80,000 each accident for Bodily Injury, $20,000 each accident for Property Damage, and $10,000 each person for PIP.
Property and Business Interruption with limits set for Hawaiʻi’s higher rebuild costs. Flood is not covered by standard property policies, so buy NFIP or private flood. Equipment Breakdown with Spoilage. Cyber for breach response. EPLI for employment-related claims.
Sources
[1] Haw. Rev. Stat. §386123. Failure to give security for compensation; penalty; injunction. https://www.capitol.hawaii.gov/hrsarchive/hrs2021/vol07_ch0346-0398/hrs0386/HRS_0386-0123.htm. Accessed January 30, 2026.
[2] Hawaiʻi DLIR, Disability Compensation Division. About Workers’ Compensation (WC). https://labor.hawaii.gov/dcd/home/aboutwc/. Accessed January 30, 2026.
[3] Haw. Rev. Stat. §386121. Security for payment of compensation; misdemeanor. https://www.capitol.hawaii.gov/hrsarchive/hrs2004/Vol07_Ch0346-0398/HRS0386/HRS_0386-0121.htm. Accessed January 30, 2026.
[4] City & County of Honolulu Liquor Commission. Annual Liquor License Renewal (FY26). https://www.honolulu.gov/liq/annual-liquor-license-renewal/. Accessed January 30, 2026.
[5] Haw. Rev. Stat. § 281-31(s). PART III. LICENSES AND PERMITS, GENERAL PROVISIONS. HRS_0281.pdf. Accessed February 10, 2026.
[6] Maui County Liquor Control Commission. Public Hearing Notice (insurance requirement, license classes). https://statelegals.staradvertiser.com/2025/03/06/0001486059-01/. Accessed January 30, 2026.
[7] County of Hawaiʻi Department of Liquor Control. Liquor Licenses & Permits – Renewal. https://liquorpermits.ehawaii.gov/hawaii/wf/index.html. Accessed January 30, 2026.
[8] County of Kauaʻi Department of Liquor Control. News Release (Apr 9, 2024). https://content.govdelivery.com/accounts/HIKAUAICOUNTY/bulletins/3956e77. Accessed January 30, 2026.
[9] Hawaiʻi DCCA Insurance Division. Auto Insurance Minimum Limits—FAQ (effective Jan 1, 2026). https://cca.hawaii.gov/ins/files/2026/01/Auto-Minimum-Limits-FAQs.pdf. Accessed January 30, 2026.
[10] Haw. Rev. Stat. §431:10C301. Required motor vehicle policy coverage. https://law.justia.com/codes/hawaii/title-24/chapter-431/section-431-10c-301/. Accessed January 30, 2026.
[11] Insurance Information Institute. Commercial General Liability Insurance—What it Covers. https://www.iii.org/article/commercial-general-liability-insurance. Accessed January 30, 2026.
[12] Rider Levett Bucknall. RLB Construction Cost Report—Hawaiʻi (Q3 2025). https://www.rlb.com/americas/insight/rlb-construction-cost-report-hawaii-q3-2025/. Accessed January 30, 2026.
[13] FEMA. Flood Insurance (NFIP): overview. https://www.fema.gov/flood-insurance. Accessed January 30, 2026.
[14] FEMA/NFIP. Summary of Coverage—Commercial Property. https://agents.floodsmart.gov/sites/default/files/media/document/2025-07/fema-nfip-summary-of-coverage-commercial-property-brochure-01-2024.pdf. Accessed January 30, 2026.
[15] Haw. Rev. Stat. §487N2. Notice of security breach. https://law.justia.com/codes/hawaii/title-26/chapter-487n/section-487n-2/. Accessed January 30, 2026.
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