{"id":1503,"date":"2022-06-16T16:14:29","date_gmt":"2022-06-16T08:14:29","guid":{"rendered":"https:\/\/www.pacificprime.hk\/blog\/?p=1503"},"modified":"2022-06-16T17:14:11","modified_gmt":"2022-06-16T09:14:11","slug":"business-insurance-hong-kong","status":"publish","type":"post","link":"https:\/\/www.pacificprime.hk\/blog\/business-insurance-hong-kong\/","title":{"rendered":"Vital business insurance products that startups should know"},"content":{"rendered":"

Starting a business in Hong Kong is a huge task. Not only do you have to come up with an idea, service, or product that\u2019ll be profitable, but you also have to navigate the world and responsibilities of being the owner of a company. Startups and Small to Medium Enterprises (SMEs) are still held to the same compliance, corporate governance, and liability standards as larger companies. This includes having to manage the risks associated with operating a business, which often involves business insurance.<\/p>\n

This Pacific Prime Hong Kong<\/a> article offers a brief introduction to the world of corporate and business insurance products that you\u2019ll need to have considered if you want to ensure compliance with local laws and protection from unexpected disruptions.<\/p>\n

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Business insurance: what\u2019s legally required, and what\u2019s important to have?<\/h2>\n

In Hong Kong, there\u2019s only one mandatory insurance requirement for businesses – Employee\u2019s Compensation (EC) insurance. Other products, such as Professional Indemnity or building insurance, are not legally required but they\u2019re seen as an absolute necessity for ensuring your business is protected from the unexpected. Essentially, your business or startup is an asset – and one that needs protecting. Here are our top business insurance products that are vital to running and maintaining a successful company.<\/p>\n

Employee\u2019s Compensation (EC) insurance<\/h3>\n

As the sole insurance product for businesses that\u2019s required by law<\/a>, this is one of the first things you\u2019ll want to secure. EC is made compulsory to protect workers in the workplace. This insurance protects not only your staff but also your business in the event that a staff member is hurt or injured carrying out their duties for the company. With its status as a legally mandated business insurance product, the market includes a range of basic to more comprehensive coverage plans. Pricing is generally determined by the number of employees you have and their salaries.<\/p>\n

Not having an EC Certificate of Insurance can see you fined up to HKD $100,000, with possible imprisonment for two years. For startups and SMEs that begin operating out of a personal home, getting coverage can be a bit trickier as such plans can have issues drawing the line between what\u2019s business and what\u2019s personal in home-run companies. The Hong Kong Government, however, can offer EC coverage under its Employees’ Compensation Insurance Residual Scheme Bureau<\/a>.<\/p>\n

General liability insurance<\/h3>\n

Before looking at how to get liability insurance for startups, you first want to understand what liability insurance actually is. Most companies can benefit from general liability insurance as it covers claims such as bodily injury, property damage, and more. If a customer injures themself on your business premises, this policy can help cover medical expenses.<\/p>\n

Likewise, general liability insurance can help pay for any damages that may occur while your employee is delivering products or services. It can also protect your company from reputational harm by covering slander, libel, and personal privacy violations. Copyright infringement claims and certain rental repairs may also be covered by this type of policy.<\/p>\n

Professional Indemnity insurance<\/h3>\n

Professional Indemnity (PI) is a business insurance product that protects you from the costs of legal action brought against your company and its staff. This can be from claims of inadequate advice, services, or designs that have caused losses to clients or third parties, as well as harm or damage caused to third parties by your staff carrying out their duties. PI insurance can help you meet the costs and expenses of mounting a legal defense, in addition to any damages or costs that are awarded to claimants.<\/p>\n

While not mandatory under Hong Kong law, particular industry bodies may require that your business purchase PI insurance for registration or qualification reasons. This may include:<\/p>\n