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Tue, May 07, 2024

Onerous Hawaiian Insurance Bill Snuffed Out Before it Hatched

Despite Somewhat Realistic Beginnings, State Committee Reaches Too Far, Faceplants

A state bill that would have required air tour operators in Hawaii to hold liability insurance over $20 million per person, per incident did not stick the landing, to the collective release of pilots in the area.

Hawaii State Senate Bill 2747 was introduced by State Senator Chris Lee, D-25, with the requirement being $1 million in liability coverage per person, per incident. That didn't last long, though, since a Senate Committee on Transportation and Culture and the Arts removed the price requirement and punted the bill over to the House Committee on Consumer Protection & Commerce (CPC) for review. They were supposed to check the language and find a more workable liability coverage amount for both the state and the industry at large, given their "expertise" in insurance limits in similar areas. Instead, they multiplied the original number twenty times, instantly setting off warning bells for anyone involved in the vacation state.

Even the vague prospect of the bill set the industry into action, though, with lobbyists jumping into the fray to protect their people. Vertical Aviation International got to it, building association with the other big names in the flight game like Aircraft Owners and Pilots Association, the National Business Aviation Association, and the National Air Transportation Association. The bunch began a "productive dialogue" with Hawaii state legislators to give their side of the story, warning them that $20M per-person was simply unworkable for those in the cash-strapped air tour game. The cost would be one thing on an open market, but legal requirements would only further worsen pricing for the end user, not to mention the risk of violating FAA grant assurances across the state. With Federal funding imperiled by their own actions, state legislators pulled the plug...for now. 

The VAI took a modest victory lap after its victory, saying it was grateful for "the constructive dialogue with Hawaii state legislators and their receptiveness to our members' input."



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