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Nonprofit child-welfare providers ask for liability relief as insurers pull back
Summary
Testimony in support of HB 1645 described an insurance crisis for child-welfare nonprofits and urged limiting indemnification and punitive damages; opponents warned the changes could reduce accountability for victims. The committee advanced the measure with amendments and asked staff to consider modification language from providers.
House Bill 1645 would change liability rules for nonprofit child‑welfare service organizations that contract with the state, including requiring state indemnification clauses in some contracts, limiting punitive damages, eliminating joint and several liability for those nonprofits, and changing trial provisions. Nonprofit providers including PACT and Child & Family Service testified that rising insurance costs and insurers exiting the market threaten service continuity and urged the committee to adopt liability protections or amendments to prevent providers from leaving the system.
Trisha Kajimura (PACT) described a recent renewal where providers faced withdrawn coverage and sharply increased premiums, saying PACT "ended up paying 3 times the premium for less coverage than we had before." Other providers asked for amendments to prohibit state-required indemnity clauses and to align providers' liability with the state’s existing liability protections. The Hawaii Association for Justice opposed the bill, arguing the changes could reduce remedies for victims of abuse or neglect and remove important deterrence mechanisms such as punitive damages.
The committee recommended moving HB 1645 with amendments to clarify that the chapter applies to nonprofit child‑welfare organizations under contract with DHS, to require sufficient insurance, and to adjust language on liability and indemnification per stakeholder suggestions.
