Hong Kong businesses that lease office or retail space need insurance protection for their business property, which will include office equipment, electronics, office furniture, and possibly product inventory.
Hong Kong businesses operating out of a commercial building which they own, shoulder an even greater risk as the building may well be the company’s most valuable asset. Perils such as fire, windstorms, vandalism, and typhoon present considerable risk to property and the contents within. Without the appropriate insurance cover in place, business owners are left paying out-of-pocket in the event of a loss, which naturally puts the business at significant financial risk.
If your commercial building has a mortgage, your lender will require Commercial Property Insurance to protect their interest in your building. Typically, every business owner understands this. However, it is also essential to recognise the need to insure property at replacement cost rather than actual cash value. The replacement cost cover provides enough protection that in the event of a total loss, your business would have sufficient funds to rebuild your building in an as-new condition.
Business Property Insurance (Contents)
A typical Hong Kong business owner is going to have a substantial amount of business property within their building, and so cover for these valuable assets is vital to surviving a major claim. Consider for a minute everything within your shop or office that is not attached to the building. These resources are considered business property and should therefore be insured for an amount sufficient to replace all of them (and any inventory) within your building.
Loss of Income Insurance
Many times, when a business is damaged from a covered peril, it still loses income as operations halt while the building is under repair. Your Commercial Property Insurance provides cover to reimburse you for the loss of income plus the expenses for recovering from the loss.
Temporary Relocation Expenses Insurance
In many cases after a loss, the business may be forced to relocate while the damaged building is under repair. Relocation expenses can be significant, but can be covered under your Commercial Property Insurance policy.
The Commercial Property Insurance policy for Hong Kong businesses is fairly standard. What property owners must also consider is whether they want to insure at replacement cost (new for old) or actual cash value (new minus depreciation). The amount of your deductible is also an important issue since this represents the amount of money you are willing to pay out-of-pocket along with the payment from your insurer.
For advice about obtaining comprehensive cover for your commercial property and the contents within, contact your Trusted Union advisor for a free consultation or quote.