What happens to a contractor's license if they fail to maintain required insurance coverage in Hawaii?
Correct Answer
B) License may be suspended or revoked
Failure to maintain required insurance coverage can result in license suspension or revocation under Hawaii contractor licensing laws.
Why This Is the Correct Answer
Under Hawaii contractor licensing law, maintaining required insurance (general liability and workers compensation where applicable) is a continuing condition of licensure. Failure to keep coverage current gives the DCCA grounds to suspend or revoke the license, because the contractor no longer meets a prerequisite for holding the license.
Why the Other Options Are Wrong
Option A: License remains valid but with restrictions
A license with restrictions is not a standard Hawaii remedy for insurance lapse. The statute treats adequate insurance as a binary requirement — either you have it or you don't — and the consequence of non-compliance is suspension or revocation, not a restricted license.
Option C: License is converted to a lower class
Converting the license to a lower class is not an available remedy under Hawaii law for insurance non-compliance. License classes reflect the contractor's qualifications and scope of work, not their insurance status.
Option D: License is automatically renewed with a penalty
Automatic renewal with a penalty is not a mechanism established in Hawaii contractor licensing statutes. The DCCA does not automatically renew lapsed-insurance licenses; it takes disciplinary action.
Memory Technique
Insurance = License Lifeline. Let the insurance lapse, and the license follows. The DCCA treats required coverage as a non-negotiable condition — lose coverage, risk losing the license.
More Hawaii Questions
What is the minimum general liability insurance coverage required for Hawaii contractors under HRS 444?
A contractor's license expires on June 30th. What is the late renewal penalty fee in Hawaii?
A contractor completes $85,000 worth of work on a residential project in Hawaii. The property owner fails to pay. Under HRS 507, what is the maximum lien amount the contractor can claim?
A contractor's insurance policy has a $1 million aggregate limit and a $500,000 per occurrence limit. Two separate incidents occur: one causing $400,000 in damages and another causing $300,000. How much will the insurance cover?
Under Hawaii's mechanics lien law, a subcontractor must provide preliminary notice within how many days of first furnishing labor or materials?
A subcontractor provides $28,000 worth of plumbing work but is not paid by the general contractor. Under HRS 507, what is the priority of the mechanics lien compared to a mortgage recorded before construction began?
A contractor discovers contaminated soil during excavation of a residential property. Under Hawaii environmental regulations, who must be notified immediately?
A contractor working on a project in a Hawaii historic district must obtain approval from which entity before beginning work?
A contractor fails to obtain required building permits before starting work. The property owner discovers this and terminates the contract. Under Hawaii law, what is the contractor's right to payment?
A contractor has 12 employees with a total annual payroll of $480,000. If the workers compensation rate is $12.75 per $100 of payroll, what is the annual premium?
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Under HRS 444, what is the minimum net worth requirement for a Class A general contractor license in Hawaii?
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A subcontractor completes work on February 10th, the general contractor achieves substantial completion on March 5th, and final completion occurs on March 20th. Under HRS 507, when does the lien filing deadline begin for the subcontractor?