HB 1645: DHS; Nonprofit Child Welfare Service Organizations; Child Welfare Services; Liability; Indemnification; Additional Insured; Trial; Bond

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  Many insurance carriers have withdrawn from the market, reduced coverage limits, or imposed drastically higher premiums, making coverage either unavailable or unaffordable.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.

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 pre- and post-judgment interest and punitive damages for nonprofit child welfare service organizations;

     (2)  Requiring actions against nonprofit child welfare service organizations to be tried by the court, except in certain circumstances;

     (3)  Removing joint and several liability for nonprofit child welfare service organizations; and

     (4)  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 child welfare organization that is under contract with the department of human services to provide welfare services to children.

     §   -2  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.

     §   -3  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.

     §   -4  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.

     §   -5  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 July 1, 3000.

Report Title:

DHS; Nonprofit Child Welfare Service Organizations; Child Welfare Services; Liability; 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 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 7/1/3000.  (HD3)

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

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 both child welfare service organizations and the State from utilizing indemnification clauses in child welfare service contracts or requiring either party to name the other as an additional insured;

     (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 child welfare organization that is under contract with the department of human services to provide welfare services to children.

     §   -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 July 1, 3000.

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 both child welfare service organizations and the State from utilizing indemnification clauses in child welfare service contracts or requiring either party to name the other as an additional insured.  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 7/1/3000.  (HD2)

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

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)  Requiring contracts between nonprofit child welfare service organizations and the State to include a state indemnification clause and requiring these organizations to name the State as an additional insured;

     (2)  Prohibiting punitive damages and pre- and post-judgment interest 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 child welfare organization that is contracted with the department of human services to provide services to children.

     §   -2  Nonprofit child welfare service organizations; state contracts; indemnification; additional insured.  (a)  Any contract entered into between a nonprofit child welfare service organization and the State shall include a provision that indemnifies and holds harmless the State of Hawaii and its officers, agents, and employees from and against any and all claims arising out of or resulting from the organization's provision of child welfare services, unless there is a finding of gross negligence on the part of the State.

     (b)  The nonprofit child welfare service organization shall obtain sufficient insurance to provide the indemnification under subsection (a), if requested to do so by the department of human services.

     (c)  Any insurance policy obtained by a nonprofit child welfare service organization shall name the State of Hawaii, and its officers, agents, and employees as additional insured and shall constitute primary insurance for the State, with respect to operations performed for the State.

     §   -3  Liability; interest; punitive damages.  A nonprofit child welfare service organization shall not be liable for:

     (1)  Interest prior to or after judgment; or

     (2)  Punitive damages.

     §   -4  Jury trial, when.  Any action against a nonprofit child welfare service organization under this chapter 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)  Any other law to the contrary notwithstanding, in any case in which a nonprofit child welfare service organization is determined to be a tortfeasor along with one or more other tortfeasors, the organization shall be liable for no more than that percentage share of the damages attributable to the 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 July 1, 3000.

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.  Requires contracts between nonprofit child welfare service organizations and the State to include a state indemnification clause and requires these organizations to name the State as an additional insured.  Prohibits punitive damages and pre- and post-judgment interest 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 7/1/3000.  (HD1)

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

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 social 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 these nonprofit 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 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 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 these nonprofit organizations is the growing frequency and severity of lawsuits involving child-related tragedies.  Litigation strategies often include nonprofit organizations even when they are not found responsible, resulting in nuclear judgments that destabilize the insurance market.  As a result, nonprofit organizations are increasingly forced to rely on excess and surplus lines insurance coverage, which offers reduced liability protection at significantly higher costs.

     The legislature finds that if this issue is not addressed, nonprofit 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 legislature further finds that legislative and administrative solutions are needed to ensure that nonprofit organizations that provide foster care services can obtain reasonable and sustainable liability insurance coverage, thereby safeguarding the continuity of essential services for children and families across the State.

     The purpose of this Act is to provide certain liability protections for nonprofit foster care agencies that are under contract with the State to provide foster care services to children in foster care, including:

     (1)  Requiring contracts between foster care agencies and the State to include a state indemnification clause and requiring foster care agencies to name the State as an additional insured;

     (2)  Prohibiting punitive damages and pre- and post-judgment interest for foster care agencies;

     (3)  Requiring actions against foster care agencies to be tried by the court, except in certain circumstances;

     (4)  Removing joint and several liability for foster care agencies; and

     (5)  Specifying that no bond shall be required from a foster care agency 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

FOSTER CARE AGENCIES; FOSTER CARE; LIABILITY

     §   -1  Definitions.  As used in this chapter:

     "Authorized agency" means the department of human services, other public agency, or a foster care agency that is licensed by the department of human services or approved by the family court to receive children for control, care, maintenance, or placement.

     "Foster care" means continuous twenty-four-hour care and supportive services provided for a child by an authorized agency or the family court.

     "Foster care agency" means a nonprofit organization or entity that is under contract with the State to provide foster care services for children in foster care.

     §   -2  Foster care agencies; state contracts; indemnification; additional insured.  (a)  Any contract entered into between a foster care agency and the State to provide foster care shall include a provision that indemnifies and holds harmless the State of Hawaii and its officers, agents, and employees from and against any and all claims arising out of or resulting from the foster care agency's provision of foster care, unless there is a finding of gross negligence on the part of the State.

     (b)  The foster care agency shall obtain sufficient insurance to provide the indemnification under subsection (a), if requested to do so by the department of human services.

     (c)  Any insurance policy obtained by a foster care agency shall name the State of Hawaii, and its officers, agents, and employees as additional insured and shall constitute primary insurance for the State, with respect to operations performed for the State.

     §   -3  Liability; interest; punitive damages.  A foster care agency shall not be liable for:

     (1)  Interest prior to or after judgment; or

     (2)  Punitive damages.

     §   -4  Jury trial, when.  Any action against a foster care agency under this chapter 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   Foster care agency as a tortfeasor; abolition of joint and several liability.  (a)  Any other law to the contrary notwithstanding, in any case in which a foster care agency is determined to be a tortfeasor along with one or more other tortfeasors, the foster care agency shall be liable for no more than that percentage share of the damages attributable to the foster care agency.

     (b)  For purposes of this section, the liability of a foster care agency 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 foster care agency, and the operation or enforcement of the judgment is stayed, no bond, obligation, or other security shall be required from the foster care agency."

     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 upon its approval.

Report Title:

Foster Care Agencies; Foster Care; Liability; Indemnification; Insurance; Trial; Bond

Description:

Provides certain liability protections for foster care agencies that are under contract with the State to provide foster care services to children in foster care.  Requires contracts between foster care agencies and the State to include a state indemnification clause and requires foster care agencies to name the State as an additional insured.  Prohibits punitive damages and pre- and post-judgment interest for foster care agencies.  Requires actions against foster care agencies to be tried by the court, except in certain circumstances.  Removes joint and several liability for foster care agencies.  Specifies that no bond shall be required from a foster care agency on appeal.

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

STAND. COM. REP. NO.  1044-26

Honolulu, Hawaii

                , 2026

RE:   H.B. No. 1645

      H.D. 3

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Madame:

     Your Committee on Consumer Protection & Commerce, to which was referred H.B. No. 1645, H.D. 2, entitled:

"A BILL FOR AN ACT RELATING TO LIABILITY,"

begs leave to report as follows:

     The purpose of this measure 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 an indemnification clause or 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.

     Your Committee received testimony in support of this measure from the Hawaii Insurers Council; Catholic Charities Hawaiʻi; Hawaiʻi Community Foundation; Parents and Children Together; Child & Family Service; SanHi Government Strategies; and numerous individuals.  Your Committee received testimony in opposition to this measure from the Department of the Attorney General and Hawaii Association for Justice.  Your Committee received comments on this measure from the Department of Commerce and Consumer Affairs and one individual.

     Your Committee finds that nonprofit child welfare service organizations are critical partners in delivering services that support child and family well-being.  These organizations contract with the State to provide prevention services, foster family services including kinship care, and a variety of therapeutic services.

     Your Committee further finds that liability insurance is critical to the operation of child welfare and foster care programs, as it functions as a primary risk-management mechanism and financial safety net against claims arising from the provision of services.  The child welfare field is inherently high-risk because it serves children in complex, high-stress environments that increase the likelihood and severity of claims.  This has led to insurance carriers either withdrawing from the market, reducing coverage, or increasing premiums to unaffordable levels.  This measure seeks to resolve this issue by providing essential liability protections for nonprofit child welfare service organizations.

     Your Committee has amended this measure by:

     (1)  Removing language that prohibited child welfare service contracts between nonprofit child welfare service organizations and the State from utilizing indemnification clauses;

     (2)  Removing language that prohibited nonprofit child welfare service organizations and the State from requiring either party to name the other as an additional insured; and

     (3)  Making technical, nonsubstantive amendments for the purposes of clarity, consistency, and style.

     Your Committee notes that joint and several liability is the main factor responsible for rising liability insurance rates currently faced by nonprofit child welfare service organizations.  However, as this measure moves through the legislative process, future committees may wish to consider the impact indemnification clauses have on liability insurance rates.  If indemnification clauses are indeed a key contributing factor in rising premiums, similar to joint and several liability, future committees may wish to consider reinserting provisions in this measure that prohibited the utilization of indemnification clauses in contracts between the State and nonprofit child welfare service organizations.

     As affirmed by the record of votes of the members of your Committee on Consumer Protection & Commerce that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1645, H.D. 2, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 1645, H.D. 3.

Respectfully submitted on behalf of the members of the Committee on Consumer Protection & Commerce,

STAND. COM. REP. NO.  739-26

Honolulu, Hawaii

                , 2026

RE:   H.B. No. 1645

      H.D. 2

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Madame:

     Your Committee on Judiciary & Hawaiian Affairs, to which was referred H.B. No. 1645, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO LIABILITY,"

begs leave to report as follows:

     The purpose of this measure 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)  Requiring contracts between nonprofit child welfare service organizations and the State to include a state indemnification clause and requiring these organizations to name the State as an additional insured;

     (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.

     Your Committee received testimony in support of this measure from the Hawaii Insurers Council; American Property Casualty Insurance Association; Parents And Children Together; Catholic Charities Hawaiʻi; Child and Family Service; Hawaiʻi Community Foundation; and seven individuals.  Your Committee received testimony in opposition to this measure from the Hawaii Association for Justice.  Your Committee received comments on this measure from the Department of Commerce and Consumer Affairs.

     Your Committee finds that nonprofit child welfare service organizations are experiencing a severe liability insurance crisis that threatens their ability to contract with the State and continue providing essential services to children and families.  Your Committee further finds that indemnification and additional insured requirements in state contracts place disproportionate liability and defense costs on nonprofit providers, exacerbating insurance affordability challenges.  Your Committee therefore finds that amending this measure to eliminate mutual indemnification and additional insured requirements more appropriately aligns liability with actual responsibility and supports the continuity of child welfare services statewide.

     Your Committee has amended this measure by:

     (1)  Clarifying the definition of "nonprofit child welfare service organization" to mean a nonprofit child welfare organization that is under contract with the Department of Human Services to provide welfare services to children;

     (2)  Amending the child welfare service contract requirements to prohibit both child welfare service organizations and the State from utilizing indemnification clauses or requiring either party to name the other as an additional insured; and

     (3)  Making technical, nonsubstantive amendments for the purposes of clarity, consistency, and style.

     As affirmed by the record of votes of the members of your Committee on Judiciary & Hawaiian Affairs that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1645, H.D. 1, as amended herein, and recommends that it be referred to your Committee on Consumer Protection & Commerce in the form attached hereto as H.B. No. 1645, H.D. 2.

Respectfully submitted on behalf of the members of the Committee on Judiciary & Hawaiian Affairs,

STAND. COM. REP. NO.  65-26

Honolulu, Hawaii

                , 2026

RE:   H.B. No. 1645

      H.D. 1

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Madame:

     Your Committee on Human Services & Homelessness, to which was referred H.B. No. 1645 entitled:

"A BILL FOR AN ACT RELATING TO LIABILITY,"

begs leave to report as follows:

     The purpose of this measure is to provide certain liability protections for foster care agencies that are under contract with the State to provide foster care services to children in foster care.

     Your Committee received testimony in support of this measure from Parents and Children Together; Hale Kipa; Child and Family Service; Hawaii Insurers Council; American Property Casualty Insurance Association; and one individual.  Your Committee received testimony in opposition to this measure from the Hawaii Association for Justice.  Your Committee received comments on this measure from the Department of Commerce and Consumer Affairs and Department of Human Services.

     Your Committee finds that child welfare service providers face increasing difficulty in accessing and affording liability insurance coverage.  Your Committee further finds that these pressures are threatening the viability of essential programs statewide.  This measure addresses liability exposure, indemnification practices, and legal standards that directly impact insurers' risk assessment, which are important steps toward stabilizing the child welfare service system and preserving the State's ability to contract with nonprofit providers.

     Your Committee has amended this measure by:

     (1)  Replacing the term "nonprofit foster care agencies" with "nonprofit child welfare service organizations" to reflect the broad continuum of child welfare;

     (2)  Removing references to and deleting the corresponding definition of "foster care";

     (3)  Changing the effective date to July 1, 3000, to encourage further discussion; and

     (4)  Making technical, nonsubstantive amendments for the purposes of clarity, consistency, and style.

     Your Committee notes a request raised in testimony before your Committee that indemnification clauses be prohibited in state contracts, rather than required.  This testimony noted that existing state contracting practices that require nonprofit agencies to indemnify the State effectively shift the State's liability onto nonprofit providers that are acting as agents of the State, and that these practices have directly contributed to skyrocketing insurance premiums.  Your Committee respectfully requests that, as this measure moves through the legislative process, this matter be discussed further to explore whether prohibiting this type of indemnification clause would be possible.

     As affirmed by the record of votes of the members of your Committee on Human Services & Homelessness that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1645, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1645, H.D. 1, and be referred to your Committee on Judiciary & Hawaiian Affairs.

Respectfully submitted on behalf of the members of the Committee on Human Services & Homelessness,