If your Hawaii corporation has any employees, yes, it must carry workers compensation insurance, because Hawaii requires coverage once you have any employee under Chapter 386. What surprises many owners is that Hawaii treats corporate officers more strictly than most states: an officer is left off coverage only in two narrow cases, so a normal paid officer is usually a covered employee who counts and must be on the policy.
Who this is for: Owners and officers of a Hawaii C-corp or S-corp, whether it is a one-person corporation or a company with a full payroll.
The short version
- A corporation with any employee must carry workers comp; officers can be employees too.
- An officer is excluded only if they own at least half of the corporation.
- An officer is also excluded if they serve without pay, own at least 25 percent, and the corporation has no employees.
- A paid officer of a corporation with other employees is generally a covered employee.
- Excluded owners are off by default and can opt in through voluntary coverage.
How Hawaii treats corporate officers
This is the part to get right, because Hawaii is narrower than most states. Your officers are covered employees unless one of two things is true. First, an officer who owns at least 50 percent of the corporation is excluded. Second, an officer is excluded if they perform service without wages for a corporation that has no employees and they own at least 25 percent of it. Outside those two cases, an officer is a covered employee. That means a paid officer, or any officer once the corporation has other employees, is generally on the policy and counts toward the coverage rule. Hawaii courts have even treated the sole director and shareholder of a corporation as an employee.
| Officer situation | Covered employee? | Why |
|---|---|---|
| Owns at least 50 percent of the corporation | No, excluded | Large-owner exclusion; may opt in |
| Unpaid, owns at least 25 percent, corporation has no employees | No, excluded | Narrow unpaid-officer exclusion |
| Paid officer, owns under 50 percent | Yes | A paid officer below the ownership line is an employee |
| Officer of a corporation that has other employees | Yes | The unpaid exclusion needs a corporation with no employees |
What this means for your policy
Because Hawaii counts most officers as employees, the safe move is to assume your working officers are on the policy unless one clearly meets an exclusion. If an officer does qualify to be excluded but wants their own injuries paid, they can opt in through voluntary coverage. Either way, every non-owner employee has to be covered from the first day, and leaving officers off when they do not actually qualify for an exclusion is a common way to end up underinsured and short on premium.
A Honolulu example
Illustrative, not a quote. A Honolulu design-build corporation has two owner-officers who each hold 50 percent and three W-2 employees. The corporation clearly needs a policy for the three employees. Because each officer owns at least half, both officers are excluded by default, but they work on job sites, so they opt in through voluntary coverage to protect themselves. A minority officer who held only 20 percent and drew a salary would instead be a covered employee automatically. We review who actually qualifies for an exclusion so nobody is left off by mistake. See our workers comp for manufacturers and shops page.
Real questions Hawaii owners ask
Does my Hawaii corporation need workers comp?
If it has any employees, yes. Hawaii requires coverage once you have one or more employees under Chapter 386, and in Hawaii most corporate officers count as employees too.
Are corporate officers covered in Hawaii?
Usually yes. An officer is excluded only if they own at least 50 percent of the corporation, or serve unpaid, own at least 25 percent, and the corporation has no employees. Otherwise the officer is a covered employee.
I am a paid officer who owns 20 percent. Am I covered?
Yes, you are a covered employee. Hawaii only excludes officers at the 50 percent ownership line, or an unpaid 25 percent owner of a corporation with no employees, so a paid minority officer counts.
Can an excluded owner-officer still get covered?
Yes. An officer who qualifies to be excluded can opt in through voluntary coverage and add themselves to the policy, which is common for owners who work on site.
Does a one-person corporation need workers comp?
Often not for the owner alone. If the sole owner-officer owns at least half and there are no employees, they are excluded. Hire anyone and a policy is required for that worker.
What if I leave officers off the policy to save money?
That is risky in Hawaii. If an officer does not actually meet an exclusion, they are a covered employee, and leaving them off can leave you underinsured and short on premium at audit.
Does S-corp or C-corp status change the answer?
No. Hawaii's officer rules turn on ownership share, pay, and whether the corporation has employees, not on how the corporation is taxed. The 50 percent and unpaid 25 percent tests apply either way.
Why Hawaii owners choose Morrow
- We shop the right market for you. Hawaii has no state-run fund, so private insurers compete for your business and we can shop your rate freely. If no insurer will take you, there is a guaranteed backstop: HEMIC, a member-owned insurer that has to cover businesses others turn down.
- We catch pricing mistakes. Your price depends heavily on the category your work falls into for pricing (the class code). Put people in the wrong category and you overpay for years. We review your payroll and classifications before you buy.
- Proof of coverage, fast. Need a certificate (proof of coverage) for a general contractor or a landlord before Monday? We turn those around the same business day for most carriers.
- We help lower the score that drives your price. Insurers give you a score based on your past claims that raises or lowers your cost (the experience modification rate). We review it each year, flag errors, and connect you with return-to-work and safety resources that bring it down.
- Real people when a claim happens. When someone gets hurt, we stay involved through the life of the claim, not just at renewal.
Related Hawaii guides
Every Hawaii business is set up a little differently. These companion guides answer the same question for other situations, plus the national explainers behind the terms used here.
- Business insurance in Hawaii (start here)
- Workers comp: the owner's overview
- I own an LLC: do I need workers comp?
- I'm a sole proprietor: do I need workers comp?
- We're a partnership: do we need workers comp?
- We're a nonprofit: do we need workers comp?
- My workers are 1099: do I still need it?
- Only part-time or seasonal staff: do I need it?
- I only employ family: do I need workers comp?
- Remote or out-of-state staff: do I need coverage?
- What happens if I don't carry workers comp?
- How much does workers comp cost?
- How do I get workers comp (even if turned down)?
- What insurance do I need for a contractor license?
- Workers compensation insurance, explained
- What workers comp costs (national guide)
- What workers comp does not cover
- Workers comp vs employers liability
- Hawaii manufacturer workers comp
This guide is general information, not legal advice. Hawaii rules and penalty amounts can change, so verify current requirements with the Hawaii Department of Labor and Industrial Relations, Disability Compensation Division or a licensed advisor before you rely on them. Last updated: July 2026.