Regardless of what type of business you run, your business operations, premises, or staff has the potential to cause bodily injury or property damage to 3rd parties. Public liability insurance in Hong Kong helps protect you and your business against this type of liability.
As a business owner, you’ve put in long days and bucket loads of blood, sweat, and tears to build your business and turn your dream into a reality. Unfortunately, one little accident can be all it takes to erase all of the hard work you’ve put in thus far. As Hong Kong (and the rest of the world) becomes a more and more litigious place, liability insurance is necessary.
Lawsuits against your business are time consuming, expensive, and can cause irreparable harm to your client relationships. Without proper liability insurance in place, you would be responsible for paying legal fees required to defend a lawsuit and compensation to plaintiffs if the court requires.
What Is Public Liability Insurance?
Public liability insurance is the most basic form of liability insurance available for businesses and protects you against a wide range of liability risks. It insures against liability claims brought on by 3rd parties (the public) alleging that your negligence caused them some kind of bodily injury or property damage.
An often overlooked aspect of public liability insurance is that the insurer will step in to defend you if a claim arises – even if that claim is frivolous. This means that the insurer will pay for any court costs, bonds, legal fees, etc. expended in your defense. This means that when a lawsuit occurs, you don’t need to waste your precious time dealing with paperwork and can focus on continuing to run your business and service your customers. The insurance company will handle the heavy lifting for you.
Do I Need Public Liability Insurance in Hong Kong?
The short answer is yes - all business can benefit from having public liability insurance. Whether you’re a home-based business, run a small retail shop, or a multinational conglomerate, your day to day business activities and even your premises itself has the potential to cause serious bodily injury or property damage to a member of the public.
For example, let’s say you run an executive recruitment business out of a rented office space in Central. While you do your best to make sure that the premises is safe for clients that come for meetings, mistakes are bound to happen. That morning, one of your staff accidentally spilled some water on the ground and forgets to clean it up. When your client comes in for their meeting, he slips and falls on the water and breaks his arm while trying to break his fall.
Without insurance, you would be on the hook for paying his medical bills and maybe even their long-term suffering out of pocket. But with public liability insurance, the insurer will step in to defend you and pay for any liability arising out of that person’s injury.
Even if you run a home based business or one without a physical location that customers, business partners, or the general public can visit, your operations can still be a major source of liability.
For example, let’s say you ran a moving company serving business and individual clients. If you or one of your employees were to accidentally damage your client’s antique vase while handling it, you would be liable for compensating them. Fortunately, if you had public liability insurance, you would not need to pay for the vase out of pocket.
What Are Some Important Things to Know About Public Liability Insurance?
While the coverages are very broad, there are a few key exclusions you should be aware of:
- Liability for bodily injury or property damage to yourself or your employees is not covered. To get coverage for these things, look at purchasing personal insurance, commercial/business property insurance, and employee’s compensation insurance.
- Professional liability (E&O or Medical Malpractice) are not covered. This type of coverage must be purchased separately.
Also when you’re trying to decide how much insurance to buy, you should take the following things into consideration:
- Average contract size and annual revenues
- Damages awarded in lawsuits involving similar businesses
- The types of customers you work with
- The type of business you operate and the risks you are exposed to
Not only will the above factors affect how much insurance you should buy, it also affects the cost of public liability insurance for your business.
How Do I Get Public Liability Insurance?
To compare public liability insurance policies and find out which one would be the best fit for your business needs and budget, get in touch with a licensed Trusted Union business insurance advisor for a no-obligation risk consultation and quote.
