Do I need workers compensation insurance?

Workers Compensation Insurance Requirements in Hawaii

In Hawaii, workers compensation insurance is mandatory for most businesses that have employees. This coverage protects both employers and employees by providing benefits for work-related injuries or illnesses.

When You Need Workers Compensation Insurance

• Employers with Employees: If your business has one or more employees, you are required to carry workers compensation insurance.
• Exemptions: Sole proprietors and partners without employees typically do not need this insurance, but it’s important to verify based on your business structure.
• Employee Classification: Properly classify workers as employees or independent contractors to ensure compliance with insurance requirements.

Operational Considerations

• Business Registration: Ensure your business is properly registered with the Hawaii Department of Commerce and Consumer Affairs before obtaining insurance.
• Insurance Providers: Obtain coverage through authorized insurance carriers or the Hawaii Workers’ Compensation Insurance System.
• Payroll and Recordkeeping: Maintain accurate payroll records and documentation of employee work status to support compliance and claims processing.
• Reporting Requirements: Report workplace injuries promptly as required by state regulations to avoid penalties.
• Compliance Monitoring: Regularly review your insurance coverage and employee status to stay compliant with any changes in state law.

As of 2026, staying up to date with Hawaii’s workers compensation rules helps protect your business from fines and legal risks while supporting employee safety and well-being.