RELATING TO CHILD WELFARE SERVICE ORGANIZATIONS.

SB3164

THE SENATE

S.B. NO.

3164

THIRTY-THIRD LEGISLATURE, 2026

STATE OF HAWAII

A BILL FOR AN ACT

RELATING

TO

CHILD
WELFARE SERVICE ORGANIZATIONS
.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

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SECTION 1.
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The
legislature finds that 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.
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The legislature further finds that these child
welfare service organizations are now facing extreme challenges in securing
general and professional liability insurance coverage.
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Many insurance carriers have withdrawn from
the market, reduced coverage limits, or imposed drastically higher premiums,
making coverage either unavailable or unaffordable.

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The legislature additionally finds that
without adequate liability insurance coverage, child welfare service
organizations cannot maintain state contracts or deliver critically needed
services.
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The legislature also finds
that rising insurance costs combined with stagnant contract reimbursements
threaten the financial sustainability of these child welfare service
organizations.
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These circumstances risk
disrupting services provided by 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.

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

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

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Accordingly, the purpose of this Act is to
provide certain limited liability protections for nonprofit child welfare
service organizations that contract with the State to provide child welfare
services to children and families, including:

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(1)
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Prohibiting
contracts between child welfare service organizations and the State from
including state indemnification clauses or requiring the State to be an
additional insured under child welfare service organization insurance policies;
and

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(2)
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Eliminating
joint and several liability for child welfare service organizations by limiting
liability to each organization's percentage share of damages.

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SECTION 2.
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The Hawaii Revised Statutes is amended by adding a new chapter to be
appropriately designated and to read as follows:

"
Chapter

CHILD WELFARE SERVICE ORGANIZATIONS

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-1
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Definitions.
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As used in this chapter:

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"Child welfare service
organization" means a child welfare service organization that is
contracted with the department of human services to provide services to
children and families.

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Child welfare service organizations; state
contracts; indemnification; additional insured.
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(a)
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Any
contract entered into between a child welfare service organization and the
State shall not require that the child welfare service organization defend,
indemnify, and hold harmless the State and its officers, agents, and employees
from any claims, suits, costs, or attorney's fees.

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(b)
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Any
insurance policy obtained by a child welfare service organization shall not
require that the State, and its officers, agents, and employees, be named as an
additional insured.

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Child welfare service organization as a
tortfeasor; abolition of joint and several liability.
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(a)
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Notwithstanding
any other law to the contrary, in any case in which a child welfare service
organization is determined to be a tortfeasor along with one or more other
tortfeasors, the child welfare service organization shall be liable for not
more than that percentage share of the damages attributable to the child
welfare service organization.

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(b)
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For
the purposes of this section, the liability of a child welfare service
organization shall include its vicarious liability for the acts or omissions of
its officers, agents, and employees."

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SECTION 3.
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This Act does not affect rights and duties that matured, penalties that
were incurred, and proceedings that were begun before its effective date.

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SECTION 4.
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This Act shall take effect upon its approval.

INTRODUCED BY:

_____________________________

Report Title:

Child
Welfare Service Organizations; Indemnification Clauses; Additional Insured;
Tort Liability; State Contracts

Description:

Prohibits
contracts between child welfare service organizations and the State from
including state indemnification clauses or requiring the State to be an
additional insured under child welfare service organization insurance policies.
�
Eliminates joint and several liability for
child welfare service organizations by limiting liability to each
organization's percentage share of damages.

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