Insurance solutions for your start up

So you have just started a new company and you’re full of ideas, drive and motivation - planning your budget, organizing marketing campaigns, hiring staff, looking for office space... This list is almost endless and can be daunting at times.

Insurance is often the last thing on the to-do list but protecting yourself and your company is a vital part of managing the risk of a start-up- it doesn’t take much to you and your company to the point of financial disaster. However, protection doesn’t need to cost the earth and can be kept within budget while managing risk.
As a start-up, you want to be mean and lean, so seeking out a plan with a higher deductible could result in lower monthly premiums and less pressure on your cash flow.
Below we take a look at the most vital types of insurance that start-ups in Hong Kong should consider.

Commercial General Liability

In layman’s terms this type of insurance is commonly referred to ‘slip and fall’ insurance and concerns negligence toward a third party. A CGL policy can actually cover a lot more than this and will extend to cover the majority of property damage and bodily injury caused by your employees or your company.

Often this is contractual required when you enter into an agreement with a vendor or distributor.

Claim Examples

- Bodily injury or property damage where the injured party can prove that you were negligent. Example includes a wet floor / steps that were not clearly illuminated

- Product liability –Think bodily injury or property damage due to your product or service. Child choking on your product.

Employee Compensation Insurance

This insurance protects your employees. Work places injuries and sickness are not uncommon and the legal ramifications of not having insurance to cover your employees from injury and loss of earnings can be disastrous for you and your company.
ECI or Employers Liability insurance is a statutory insurance product. The means that if you do not put this policy in place for your employees you are in breach of the EC ordinance – which means you are breaking the law.

Claim examples

- Employees that are injured during their work – Think slipping or falling or even long term injury or sickness due to occupational hazard.

- Damage to employees eyes due to years of excessive screen work – Think early onset macular degeneration.

Professional Indemnity insurance

In the everyday running of your company the advice or service that you provide to your clients can leave you exposed and thus liable.
You may not have done anything wrong, but once an allegation of negligence has been made against your company or its employees you are required to seek legal advice to defend your company.
A Professional Indemnity policy can cover your legal defense cost, and if it is proven that you were negligent in your advice or the service that you were providing, this type of insurance will cover your awarded damages to the third party.

Claim examples

- ​In uploading a new software program for a customer, a malicious code is inadvertently transferred to the network, causing loss of data and disruption to operations. The virus then spreads to the client’s computer system; there is then widespread loss of data and a computer network shutdown causing financial losses.

Cyber Liability Insurance

There can be no doubt that companies have a greater reliance on the internet, cloud computer tools and computer services to operate in the business environment. Cyber liability insurance can help mitigate the costs from data breach incidents and the loss or theft of third party data.

Losses covered can include lawsuits, data restoration costs, breach notification costs, regulatory cost. Cyber policies often include 'E-Business interruption insurance’ as well. This is a significant because it can cover the company’s expenses (and the lost profits, in some situations) if your company needs to temporarily prohibit access to the product/service after a data breach.

Claim example

- Think lawsuit stemming from a security failure or alleged technology error that results in damages to customers

- A lawsuit alleging trademark or copyright infringement

- An e-business interruption resulting from a security failure or Internet virus

- A cyber extortion threat – think Ashley Madison!

This type of insurance is not compulsory for the employer to purchase for their employees. That said with Hong Kong having some of the most expensive private medical treatment costs in the world, second only to the USA, it is often one of the prominent insurance products for employers to consider, in attracting and retaining staff. There is a public health care system in Hong Kong, so if you carry a Hong Kong ID to can use this system at very little cost for treatment.
However, the system itself is under ever increasing strain from direct immigration from mainland China and also the local population, thus if you need treatment for conditions like cancer – often the waiting list in the public system can be too long. There are a range of different polices and coverage available in Hong Kong to fit within the entrepreneur’s budget

Health Insurance

Insurance solutions for your start up

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