Your guide to property and casualty insurance in Hong Kong
Many different elements go into running a successful company. However, one of the most crucial elements that all business owners should consider in their strategy is property and casualty insurance. In fact, whether or not you have property and casualty insurance in place can affect whether or not your business survives the unexpected. But it’s not only business owners who can benefit from this type of insurance, as many home and car owners come to realize. This Pacific Prime Hong Kong guide offers an overview of property and casualty insurance in Hong Kong to help you get a clearer understanding of your options.
What is property and casualty insurance?
Also known as P&C insurance, property and casualty insurance is a type of business insurance that financially protects business owners from liability or damages in case of disasters or unforeseen incidents. It can also protect a company owner’s personal finances, credit, and reputation if something unfortunate happens on a covered businesses’ premises.
For individuals, property and casualty insurance can also be considered separately. Property insurance covers the things that you own, such as your home or vehicle. Likewise, a casualty insurance policy includes liability coverage, thereby offering protection if you are legally responsible for damaging another person’s property/belongings or injuring someone. P&C insurance is often nestled within other insurance policies, such as car and homeowners’ insurance.
With that said, the answer to “what is P&C insurance?” isn’t exactly straightforward as there are various coverage options – from coverage for customer injuries on your company’s premises and injuries that occur due to your service or product to protection from lawsuit costs involving libel and slander and more. While it can protect business owners and their employees when the company injures a person, that isn’t always the case. For example, property and casualty insurance may not cover an employee who was willfully negligent.
What does property and casualty insurance cover?
P&C insurance protects businesses from a wide array of accidents, losses, and threats regarding property and possessions. Though there are numerous types of property and casualty insurance solutions, the following are some of the most common that Pacific Prime customizes for our corporate clients to meet their unique requirements and risk exposure:
- Liabilities (e.g. Public Liability, Directors and Officers Liability, Products Liability, etc.)
- People Risk (e.g. Workers’ Compensation, Personal Accident Insurance, etc.)
- Technology Risk (such as Computer Crime and Cyber Insurance)
- Business Risk (such as Property All Risk and Money Insurance)
- Security Risk (e.g. Kidnap & Ransom, Terrorism, and Political Violence, etc.)
- Construction Risk (such as Contractors All Risk and Erection All Risk)
- Revenue Risk (e.g. Loss of Profit/Revenue, Rent Indemnity, Business Interruption, etc.)
- Other – Additional solutions include Fleet, Freight Forwarders Liability, Marine Cargo, and Jewellers Block.
Virtually every business owner needs to have P&C insurance coverage. When you provide a service or produce a product, there is always the possibility of it harming a customer. Similarly, this type of insurance is critical if you employ people since it protects employees while they are working. If you work alone, insurance coverage that pertains to your line of work is worth investing in.
What about P&C coverage for individuals?
If you own a car or property in Hong Kong (or even rent), P&C insurance may be more important than you realize. As previously mentioned, P&C insurance is often part of other insurance policies, so it can be confusing. Let’s take a closer look at car and home insurance in Hong Kong to help make things clearer.
Car insurance in HK
It’s a legal requirement for all vehicle owners in Hong Kong to possess car insurance for said vehicle. In fact, you won’t receive a vehicle registration license from the local government without a valid insurance certificate (along with the necessary paperwork). There are many choices for car insurance cover in the SAR, though they are typically split into two primary types: third party car insurance and comprehensive car insurance.
At the very least, you must have third party car insurance to have an HK motor insurance policy. This type of coverage protects policyholders against liability to third parties in the event that an accident results in personal injury or death. Most insurance providers include third party property damage (i.e. Section II insurance) along with third party car insurance, though it is possible to obtain car insurance on its own.
If you’re looking for more coverage than a third party policy, comprehensive car insurance offers basic third party protection along with vehicle theft and damage cover. Since it provides greater coverage, this type of insurance is typically more expensive.
Home insurance in HK
There are many options when it comes to home insurance in HK, but home contents insurance tends to be sufficient for most expats’ needs. In Hong Kong, two kinds of home Insurance policies available include home contents insurance and fire insurance.
Home contents insurance
Often called renters insurance in other parts of the world, home contents insurance is not a legal requirement in the SAR. It covers your household items and personal possessions against loss and theft, but not your home’s physical structure. It generally provides protection on an “all risks basis”, which means you’ll be compensated for any unforeseen or accidental loss or damage to your home possessions due to theft, fire, or flood. That is unless items are specifically excluded from the policy.
Fire insurance
As a type of home insurance policy, fire insurance protects your property’s physical structure against fire damage. This type of protection is not a legal requirement for renters though it’s often necessary for property owners with a mortgage. What’s more, fire insurance can be extended to cover “allied perils” to offer coverage against typhoons and floods. This type of insurance policy provides coverage for rebuilding costs in the event that your home is damaged due to one of the covered perils.
Meet your insurance needs with Pacific Prime Hong Kong
All companies and people are different, as are their needs. A small business may have different needs than a global enterprise, while a homeowner may have different needs than a renter. However, one thing that they all have in common is that they must identify potential risks that they want to cover. Whatever you do, don’t wait until an injury or accident happens before considering coverage.
When shopping for property and casualty insurance in Hong Kong, you need to ask questions, compare requirements and pricing, and choose the most affordable plan that meets your needs. Fortunately, working with a reputable insurance broker like Pacific Prime Hong Kong makes the process that much easier. With over two decades of industry experience, we have the knowledge and expertise to compare quotes from leading insurance providers so all you have to do is take your pick.
Contact us to learn more about how Pacific Prime Hong Kong can help you or your business today.
Jantra curates and reports on the results of Pacific Prime’s monthly newsletters, as well as manages Pacific Prime’s Deputy Global CEO’s LinkedIn posts. Complemented by her background in business writing, Jantra’s passion for health, insurance, and employee benefits helps her create engaging content - no matter how complex the subject is.
Growing up as a third-culture kid has given her a multicultural perspective that helps her relate to expats and their families while 8 years of working remotely have given her unique insight into hybrid work arrangements and enthusiasm for employee benefits.
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