Liability Insurance is Everywhere
One of the most important products in the insurance world is the humble liability policy.
Liability Insurance, simply put, protects a policyholder against financial responsibility for a loss that they may have caused to someone else. Whether the loss caused is financial, personal in the form of an injury or death, or related to property, Liability Insurance ensures that adequate compensation is provided to the victim, while the policyholder is protected from the costs of legal fees and financial judgements.
There are many different types of Liability Insurance policy, but ultimately, they all have this simple objective at heart. Whether this is the risk of having a car accident that you are responsible for, providing bad advice or making a mistake in the course of your employment, or if you suffer an injury while at work, liability insurance is here to help.
General Liability: Car Insurance
The most common form of liability insurance encountered in Hong Kong is Car Insurance.
Car insurance, a form of general liability insurance, is a critical component in the transportation sector, especially in densely populated cities like Hong Kong. This insurance is designed to address the potential risks associated with operating a vehicle, and to provide financial protection against liabilities that may arise from vehicle accidents. Third Party Car Insurance is the most basic form of car insurance and is mandatory in Hong Kong. In order to have a car registered to drive on public roads in the territory, owners must present proof of a valid Third-Party Car Insurance policy.
Third Party Liability insurance on a car covers the policyholder’s legal liability for death or injury to a third party and damage to third-party property. It is important to note that third party liability insurance doesn't cover damages to your vehicle or for any personal injuries receive from an accident for which you were at fault. However, it is possible to add additional named drivers to a policy in order to cover more people driving a single car for their liability towards others in an accident.
In Hong Kong, the minimum coverage for third party injury liability is HK$100 million per event, and for third party property damage, it's HK$2 million per event.
These minimums ensure that should an accident occur, the injured party (or parties) can receive adequate compensation. While there are more comprehensive forms of car insurance available in Hong Kong, all car insurance policies will contain the legally mandated levels of 3rd party liability protection.
Employer Liability: Employee's Compensation
Employers are responsible for ensuring their businesses are safe places to work. However, even with the best preparation, accidents will happen at work. When they do, the Employer is generally assumed to be liable for any injuries sustained by workers.
Under Hong Kong law, all employers, irrespective of the size or nature of their business, are mandated to have an Employees' Compensation insurance policy. This requirement applies regardless of whether the employees are full-time, part-time, temporary, or under apprenticeship.
Employer Liability, specifically in the context of Employee's Compensation Insurance, is a critical aspect of business operations in Hong Kong. This insurance is designed to address the potential risks associated with workplace accidents and injuries, ensuring that employees receive appropriate compensation and medical care.
Employee's Compensation Insurance provides coverage against the employer's liabilities arising from work-related injuries or diseases sustained by employees. The coverage encompasses medical expenses, loss of wages, and, in severe cases, disability or death benefits.
The compensation amount is determined based on a scale set by Hong Kong's Employee Compensation Ordinance. This scale takes into account various factors, including the age of the employee and the severity of the injury. Typically, local insurance providers offer Employee Compensation insurance coverage up to HK$100,000,000 for any single claim event.
Certain scenarios, such as accidents involving domestic helpers or specific workplace incidents, may have unique coverage stipulations. It's essential for employers to be aware of these nuances and ensure that their policies are comprehensive and compliant with local regulations. Employers who fail to purchase an Employees’ Compensation insurance plan may receive a fine from the Hong Kong Labour Department.
Professional Liability: Professional Indemnity
Professional Indemnity Insurance, also known as Errors and Omissions Insurance or Malpractice Insurance in the medical field, is a form of professional liability insurance designed to protect professionals against potential negligence claims made by their clients.
Professional Indemnity Insurance, or professional liability insurance, covers legal costs associated with defending against a claim, and any potential financial settlements arising from claims in relation to negligence, breach of duty, or misinformation. Like all insurance policies, Professional Indemnity Insurance has its limitations. It's essential to understand the policy's retroactive date, which denotes the beginning of the coverage period for past work. Additionally, claims-made policies only cover claims filed during the policy period, regardless of when the alleged incident occurred.
Errors and Omissions insurance should be a strongly considered purchase for most white-collar businesses. Lawyers, Architects, and Financial Planners can all benefit from this type of insurance protection. In fact, in some sectors – like insurance broking – the purchase of a professional indemnity insurance policy is a statutory requirement for licensing. Even if it is not a mandated purchase for your industry, dealing with a mistake can be expensive.
Given Hong Kong's status as a global business hub, the demand for professional services is high. Even with the best run business there is the possibility of a mistake or error occurring. Ensuring adequate Professional Indemnity coverage is not just a risk management strategy but a vital component in maintaining a professional's reputation and financial stability.
Liability Insurance in Hong Kong
Liability Insurance is in place all around you in Hong Kong. As you go about your daily life, a blanket of protection covers the city, and you should you be the victim of an accident caused by someone else. From Event Liability at concerts protecting participants from injuries, to Public Liability over every single street sign in the city, business and private individuals have taken steps to ensure that they are not financially responsible should an accident occur.
CCW Global is an independent insurance broker able to assist with all your Hong Kong Liability Insurance concerns. Whether you are looking at Car Insurance Coverage, or protection for your business, our team of expert advisors can walk you through a range of leading insurance options which best meet your specific needs.
Whatever your insurance concern is, Ask CCW – We’re Simplifying your Insurance.