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11 January 2023

Insurance for the gig economy: Options for Freelancers in Hong Kong

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As the gig economy continues to grow and evolve, it's important for freelance and contract workers in Hong Kong to consider their insurance options.

After all, being your own boss comes with its own set of risks and challenges.

Where a traditional, full-time, permanent employee is often covered by their employer’s Health Insurance offering, the same is not true of a gig worker. While the staff sitting in a business’ headquarters are covered by Employee Compensation insurance, the gig worker sitting on another continent is likely not.

There are myriad risks facing freelance workers; many of which are covered by traditional business through comprehensive insurance portfolios specifically designed for the task. However, a gig-worker may not be able to afford, or need the full coverage offered by a policy normally purchased by a company.

So what insurance options are there for a gig worker in the modern world?

Quite a few.

Insurance for remote and gig workers

Gig worker Personal Risks and Insurance Coverage

Gig workers face many of the same challenges that a typical business may face. Consequently, many of the same forms of coverage are required, just in smaller scope.

Hong Kong Liability Insurance

One type of insurance that gig workers may want to consider is liability insurance.

This can protect you in the event that you are sued for damages or injuries that occur as a result of your work. For example, if you are a freelance photographer and damage a client's property while on the job, liability insurance can help cover the costs of any legal proceedings.

Liability insurance is not a catch all, and is often extremely specific as to what type of liability can be covered under any given policy. If you are visiting clients, or having individuals visit you, then a Public Liability Insurance policy may be the most suitable solution.

If you are making or manufacturing goods for sale on a platform like Etsy.com or Amazon.com then a Product Liability policy may be more relevant.

Hong Kong Personal Accident Insurance

One of the more common forms of gig work is driving jobs. Whether this is a delivery driver, or a service like Uber, using a vehicle for work comes with its own risks and may require specific coverage – particularly when it comes to accidents.

Gig workers who frequently use their personal vehicle for work-related purposes may want to consider purchasing Personal Accident Insurance. This type of insurance can provide financial protection through a lump sum payment in the event of an injury sustained in a car accident.

Having such financial support can allow you to sufficiently recover while being unable to work, and provide peace-of-mind that you will be able to continue your standard of living.

Professional Indemnity Insurance

Another option for gig workers is Professional Indemnity Insurance, also known as Professional Liability Insurance or malpractice insurance.

This type of insurance can protect you against claims made by clients or customers related to errors or omissions in your work. For example, if you are a freelance consultant and provide faulty advice to a client, professional indemnity insurance can help cover the costs of any resulting legal action.

If you are a gig worker you may often be subject to your customer’s demands, and they could find you at fault if anything goes wrong with your work.

Professional Indemnity insurance covers this.

Hong Kong Health Insurance

Gig workers may also want to consider purchasing Health Insurance to cover medical expenses in the event of an illness or injury.

While Hong Kong does possess a high-quality, low-cost public healthcare system, receiving treatment can be time consuming. Private care at one of the city’s many private hospitals is usually much quicker, but comes at a far higher cost.

In Hong Kong, there are a variety of private health insurance options available to help you access private medical treatment in the event that you require care. This includes plans that cover outpatient visits, hospitalization, and pre-existing conditions, maternity, and more.

High Risk Job Insurance

Gig Workers and Employees Compensation Insurance

One of the biggest considerations that needs to be understood when it comes to Gig Workers is the issue of Employees’ Compensation Insurance.

Employees’ Compensation Insurance, also known as EC Insurance or Worker’s Comp, protects an employer’s liability towards workers who suffer an accident or injury in the routine course of their employment. In Hong Kong, if an employment contract exists then the employer needs to take out an Employees’ Compensation Insurance policy to cover all workers who have a contract.

This is mandated by the Hong Kong government.

However, as gig work becomes increasingly common in Hong Kong there have been a number of cases where EC cover has not been quite so clear. Consequently, gig worker Employees’ compensation insurance is still a grey area, especially if there is no contract.

It should be noted that, according to the Hong Kong Labour Department, a contract of employment need not be made in writing, and can exist as a verbal employment contract. This means that an employer may have to provide Employee’s Compensation protection to Gig Workers – especially if they satisfy the “contract” conditions as specified under Hong Kong Law.

Even with Employees’ Compensation protection in place, EC claims can take a long time to process. This is in stark contrast to the more efficient claims processes associated with Health and Personal Accident insurance products.

The consideration for gig workers is how best to protect themselves and their livelihoods in the event of something going wrong. While EC Insurance is mandatory, the nature of many gig workers’ jobs means that they may not be able to rely on the company they are working for to have adequate insurance protection in place, and will consequently need to take out that protection on their own.

Gig worker employee compensation insurance

Gig Workers can be “High Risk” 

One of the main challenges facing gig workers is that they may not be eligible for traditional employer-provided insurance or benefits.

Another challenge facing gig workers is that they may be classified as high-risk by insurance companies due to the nature of their work. For example, a gig worker who mainly works as a delivery driver or courier would be at higher risk of being involved in a traffic accident and may face restrictions or far higher premiums on any car insurance they may purchase.

It's also worth noting that some insurance policies may contain exclusions that could affect gig workers. For example, a personal car insurance policy may not cover damages or injuries that occur while the car is being used for “work.”

This makes it very difficult for gig workers to successfully navigate the insurance landscape and find the best possible combination of coverage solutions. Even though it may be harder to obtain insurance in disclosing your gig-work, or the nature of your employment, it is always critical to supply material facts to the insurance company providing the policy.

Unfortunately, the high-risk classification that many insurers apply to gig workers is a product of the underwriting process and cannot be avoided.

Insurance For Gig Workers in Hong Kong

If you are a gig worker in Hong Kong and are concerned about your insurance coverage, CCW Global is here to help. With our no-cost, no-obligation consultation process, our brokers work with you to identify key risks in your employment or lifestyle and will help to identify the coverage solutions best positioned to meet your unique needs.

From the full range of personal and professional insurance options we offer, we can help to build a comprehensive insurance portfolio for your work.

Please contact us today and speak to an expert broker now.

Ask CCW – we’re simplifying your insurance.

About Author

Michael Lamb is an insurance industry professional with many years of experience within the Hong Kong Insurance market. Focusing on APAC coverage issues, Michael is able to provide extensive analysis and insight to a range of pressing topics. Previously, Michael provided insurance broker Globalsurance.com with their most highly valued articles and was a key influence in the development of all the content on Pacificprime.com, Michael has a passion for insurance matched by few others in the region.

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