HB 1645

HOUSE OF REPRESENTATIVES
H.B. NO.
1645
THIRTY-THIRD LEGISLATURE, 2026
H.D. 3
STATE OF HAWAII
S.D. 1
A BILL FOR AN ACT
RELATING TO LIABILITY.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
���� SECTION 1.� The legislature finds that nonprofit child
welfare service organizations provide essential, mandated services to children
and families in partnership with the State, that otherwise would have to be
performed by the State itself.� The
legislature further finds that nonprofit child welfare service organizations
are now facing increasing challenges in securing general and professional
liability insurance coverage.� Many
insurance carriers have withdrawn from the market, reduced coverage limits, or
imposed drastically higher premiums, making coverage either unavailable or
unaffordable.
���� The legislature additionally finds
that without adequate liability insurance coverage, nonprofit child welfare
service organizations cannot maintain state contracts or deliver critically
needed services.� Furthermore, the
legislature finds that rising insurance costs combined with stagnant contract
reimbursements threaten the financial sustainability of these nonprofit
organizations.� These circumstances risk
disrupting services provided by nonprofit child welfare service organizations
under contract with the State, which would leave vulnerable children and
families without necessary resources and place an unsustainable burden on state
agencies.
���� Moreover, the legislature finds that
the underlying cause of the crisis faced by nonprofit child welfare service
organizations is the growing frequency and severity of lawsuits involving
child-related tragedies.� Litigation
strategies often include naming nonprofit child welfare service organizations
in lawsuits even when they are not found responsible, resulting in nuclear
judgments that destabilize the insurance market.� As a result, nonprofit child welfare service
organizations are increasingly forced to rely on excess and surplus lines
insurance coverage, which offers reduced liability protection at significantly
higher costs.
���� The legislature further finds that
legislative and administrative solutions are needed to ensure that nonprofit
organizations that provide child welfare services to children and families can
obtain reasonable and sustainable liability insurance coverage, thereby
safeguarding the continuity of essential services for children and families
across the State.� If this issue is not
addressed, nonprofit child welfare service organizations may withdraw from this
type of work, creating significant gaps in services and straining state
agencies that are tasked with filling those gaps.
���� The
purpose of this Act is to provide certain liability protections for nonprofit
child welfare service organizations that are under contract with the State to
provide child welfare services to children and families, including:
���� (1)� Prohibiting contracts between nonprofit child
welfare service organizations and the State from including indemnification and
hold harmless provisions and from requiring either party to name the other as
an additional insured in their respective liability insurance policies;
���� (2)� Prohibiting pre- and post-judgment interest
and punitive damages for nonprofit child welfare service organizations;
���� (3)� Requiring actions against nonprofit child
welfare service organizations to be tried by the court, except in certain
circumstances;
���� (4)� Removing joint and several liability for nonprofit
child welfare service organizations; and
���� (5)� Specifying that no bond shall be required from
a nonprofit child welfare service organization on appeal.
���� SECTION 2.� The Hawaii Revised Statutes is amended by
adding a new chapter to be appropriately designated and to read as follows:
"Chapter
NONPROFIT
CHILD WELFARE SERVICE ORGANIZATIONS; LIABILITY
���� �   -1� Definitions.� As used in this chapter, "nonprofit
child welfare service organization" means a nonprofit organization that has
entered into a contract with the department of human services to provide child welfare
services to children and families.
���� �   -2� Nonprofit child welfare service organizations; state
contracts; indemnification; additional insured.  Any contract
entered into between a nonprofit child welfare service organization and the
State shall not include any provision that allows either party to indemnify or
hold harmless the other party from and against any and all claims arising out
of the provision of child welfare services.  The State and nonprofit
child welfare service organizations shall not be required to name each other as
additional insureds in their respective liability insurance policies.
���� �   -3� Liability; interest; punitive damages.� A nonprofit child welfare service
organization shall not be liable for:
���� (1)� Interest before or
after judgment; or
���� (2)� Punitive damages.
���� �   -4� Jury trial, when.� Any action against a nonprofit child welfare
service organization to which this chapter applies shall be tried by the court
without a jury; provided that the court, with the consent of all the parties,
may order a trial with a jury, whose verdict shall have the same effect as if
trial by jury had been a matter of right.
���� �   -5� Nonprofit child welfare service organization as
a tortfeasor; abolition of joint and several liability.� (a)�
Notwithstanding any other law to the contrary, in any action in which a
nonprofit child welfare service organization is determined to be a tortfeasor
together with one or more other tortfeasors, the nonprofit child welfare
service organization shall be liable only for the percentage share of damages
attributable to the nonprofit child welfare service organization.
���� (b)�
For purposes of this section, the liability of a nonprofit child welfare
service organization shall include its vicarious liability for the acts or
omissions of its officers and employees.
���� �   -6� Judgment on appeal; no bond.� When an appeal is taken by a nonprofit child
welfare service organization, and the operation or enforcement of the judgment
is stayed, no bond, obligation, or other security shall be required from the nonprofit
child welfare service organization."
���� SECTION 3.� This Act does not affect rights and duties
that matured, penalties that were incurred, and proceedings that were begun
before its effective date.
���� SECTION 4.� This Act shall take effect on January 30,
2050.
Report Title:
DHS;
Nonprofit Child Welfare Service Organizations; Child Welfare Services;
Liability; Indemnification; Additional Insured; Trial;
Bond
Description:
Provides
certain liability protections for nonprofit child welfare service
organizations that are under
contract with the Department of Human Services to provide child welfare
services to children and families.� Prohibits
contracts between nonprofit child welfare service organizations and the State from
including indemnification and hold harmless provisions and from requiring
either party to name the other as an additional insured in their respective
liability insurance policies.� Prohibits
pre- and post-judgment interest and punitive damages for nonprofit child
welfare service organizations.� Requires actions against nonprofit
child welfare service organizations to
be tried by the court, except in certain circumstances.� Removes joint and several liability for nonprofit
child welfare service organizations.� Specifies that no bond shall be required from
a nonprofit child welfare service organization on appeal.� Effective 1/30/2050.
�(SD1)
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.