Disaster insurance for businesses in Hong Kong

Disruptions to your business can be costly, especially if you find your company affected for a significant amount of time. Disaster insurance in Hong Kong helps you see off any challenge that might hinder or halt your business and stop you from generating income. Whether it’s a natural disaster or an issue caused by human error, Pacific Prime Hong Kong has the solutions to ensure your company can always get back on its feet after calamity.

Why do I need disaster insurance?

Two recent articles in the Asia Insurance Review highlighted just how vulnerable the economies of the Asia region are to disaster. The continent is the largest in the world and also accounts for 30% of the total land area of the planet, as well as being home to 60% of the world’s population. Significant in land size and population, Asia is also extremely prone to suffering natural and manmade disasters each year.

2016 counted a total of 327 separate disaster events. 191 of these events were caused by natural forces, the remaining 136 were manmade. What’s most astounding is that of the USD 175 billion worth of economic losses experienced because of these disasters, USD 83 billion of those losses were in Asia. These events included the 7.0 magnitude earthquake near Kyushu Island in Japan, claiming 137 lives and destroying more than 8,500 buildings.

While natural disasters are often seen as hugely devastating, another article in the Asia Insurance Review noted that collisions and crashes were the top causes of liability loss in Asia. Natural hazards and accidental nature/damage ranked second and third, yet defective products and work came in at fourth. Defective products and work was actually the top cause of liability loss globally.

In Hong Kong, accidental nature/damage was the driver for 53% of liability claims in the past year. The country’s location makes it a target for typhoons and cyclones each year that, if they’re not damaging property, may also shut down public transport services and leave businesses inactive for whole days at a time. Those without disaster insurance may find it extremely hard to stay afloat and recover when Hong Kong is with an extreme event.

What can I expect from disaster insurance solutions?

Companies looking to secure a continuity of business during unforeseen events can choose from a range of disaster insurance solutions that meet their needs. Those of you with companies that operate solely within Hong Kong can choose to partner with a local insurance company, while those with offices across the greater Asia will want an insurer with a global reach.

Whatever your risk profile and needs, Pacific Prime Hong Kong has a range of policy types you should take interest in:

Property insurance

Just like home and contents insurance for private homeowners, property insurance protects the assets of your business from a wide range of damaging causes. Fire, earthquakes, explosions, wind and storm damage, frozen pipes and water damage, as well as theft and vandalism. Property insurance can cover damage to building premises and office equipment as well, which can include garages, patios and other features on your property.

Those of you who take out a mortgage on a commercial property will likely find that holding a property insurance policy will be required by your lender. Flooding damage, it should be noted, can often be exempt from coverage if your business property is located in an area that is high risk for floods. If this is the case, you may be able to secure flood coverage separately at an extra cost.

Business interruption insurance

Businesses disrupted by natural events or human-caused issues can cause strain on your cashflow. This type of disaster insurance is to help you stay afloat during challenging times, and get you back on your feet again sooner. Natural disasters that damage building premises can make offices unsafe to operate from, halting business until repairs can make it safe again for staff to enter.

Particularly for Hong Kong, civil warnings for citizens to stay home for safety reasons can come in the form of observatory-issued typhoon and heavy rain warnings, or from disease-control directives in the event that a contagious illness has been identified. The 2003 bird flu epidemic showed just how much business can be interrupted when staff are directed by the government to avoid travel for safety reasons.

Business interruption policies will help you meet creditor bills, as well as cover your obligations to employees and other business partners if your company faces significant downtime. These insurance benefits can be the lifeline your company might need to weather the storm through to calmer waters. Beyond helping you meet your payment obligations, these policies can also help kick in where your own suppliers or distributors cause hold ups.

Third party liability insurance

Lastly, human error can sometimes be the cause of disruption and liability to your business. A vehicle collision involving a company car or a chemical spill that breaches environmental protection laws can leave your company open to some hefty bills and fines. Third party liability coverage ensures that the integrity of your business remains intact so such incidents don’t cripple and bankrupt you.

Some countries, such as China, require that business owners hold certain levels of third party liability insurance to legally operate. Such plans can come with a maximum level of benefits that they can pay out in the event you become liable to pay damages and compensation. When considering third party liability plans, it pays to think about some of your possible “worst case scenarios” to ensure you are adequately covered.

How do I find appropriate disaster insurance for my business in Hong Kong and Asia?

Beyond these three main types of insurance, you may also want to consider things like vehicle insurance for those with a fleet of motor vehicles, or employer-provided health insurance for those wanting to offer extra incentives to desirable candidates. Finding the right disaster insurance solutions very much depends on what the needs are of your company.

At the very least, you should always look to ensure that the important parts of your business can continue to operate and generate income or return to business-as-usual, even when your worst case scenario takes place. The right insurance solution package can take a lot of the stress out of dealing with disasters when they occur, allowing you to focus on what you need to – running your company.

If you think you may have some gaps in your current disaster insurance coverage or you’re just starting out and need advice on what your needs are, the experienced team at Pacific Prime Hong Kong are here for you. Their expert advisors have more than 15 years’ experience in tailoring comprehensive solutions for businesses in Hong Kong.

For advice on what disaster insurance solutions can do for you and your business, contact the team at Pacific Prime today!