Business Liability Insurance

General Liability and What It Actually Answers

Liability insurance answers what you owe somebody else. Not your own losses — theirs. A third party is hurt, or their property is harmed, and they say your operation caused it.

Three things follow from that one sentence. It responds to claims made against you rather than to your own misfortune. It pays their loss and your defence, so the legal work is funded from the first letter rather than after a judgment. And it is triggered by the incident, so the year the thing happened is the year that answers, however long the argument runs afterwards.

The common heads are third party bodily injury, third party property harm, and the legal costs of resisting either. Most Hong Kong wordings add tenants’ obligations to a landlord, and many add products once goods leave your control.

What it does not answer is worth stating too. Injury to your own staff belongs with employees’ compensation, which is compulsory here. Pure financial loss caused by advice is a professional indemnity matter. And an allegation against a director personally is officers’ liability, which is a different contract again.

Professional insurance and liability insurance get used interchangeably in tender documents. They are not the same thing, and a company that holds one and is asked for the other finds out at the worst moment.

Public Liability Cover for Hong Kong Businesses

This is the one almost every Hong Kong operation is asked for, and usually by somebody else rather than by choice.

Landlords require it before handing over a unit. Shopping centres require it before a promotion goes ahead. Government tenders require it, and so do most main contractors before a subcontractor is allowed on site. The limit is stated in the agreement, and the certificate has to be produced before anybody starts.

The limit asked for in Hong Kong has drifted upwards over the years, and a figure that satisfied a landlord five years ago will often not satisfy the same landlord today. Because the premium rises far more slowly than the limit does, buying a level above the minimum is usually cheap insurance against being asked again.

Product liability insurance sits alongside it for anyone who makes, imports, brands or resells goods. The exposure follows the product after it has left you, which is why importers and distributors are asked for it even though they manufacture nothing.

We arrange both, read the contract clause you have been sent, and tell you plainly whether what you hold already satisfies it. That check takes minutes and is worth doing before signing rather than afterwards.

Corporation Liability and Who Gets Named

Hong Kong has one exposure that catches people who never thought of themselves as running a business at all. If you sit on the management committee of an owners’ corporation, the corporation carries obligations to everybody who uses the common parts, and the committee members are exposed alongside it.

Corporation liability arrangements answer that. A visitor slips in a lobby, something falls from a common area, a lift fails — the claim goes to the corporation, and without an arrangement in place the owners fund it between them.

The same logic reaches ordinary companies from a different direction. Where a claim is brought, it is usually brought against the company and against whichever individuals are convenient to name. The company’s own arrangement answers the first half; the second half is where officers’ liability becomes the relevant contract.

Two practical points. Check that every legal entity you operate through is named on the schedule, because a subsidiary left off is not covered by its parent’s policy. And check that the interests of anyone who is contractually entitled to be noted — a landlord, a principal, a financier — are actually recorded, since that is what the certificate is being asked to prove.

None of this is exotic and none of it is expensive to get right. It is simply a set of names on a schedule, checked once a year against how the operation is actually structured now rather than how it was structured when the arrangement was first written.

When Something Goes Wrong on Your Premises

The sequence matters more than most people expect, and the first hour sets the tone for everything after it.

Deal with the person first. Then record what happened while it is fresh — time, place, conditions, who saw it, photographs of the spot before anything is cleaned or moved. That record is what the insurer works from months later, and nothing recreates it afterwards.

Then tell us. The duty is to notify when issues occur, not when a demand arrives, and notifying early costs nothing while notifying late can genuinely prejudice the position. A great many notifications never turn into anything at all.

What you should not do is accept responsibility on the spot. Sympathy is fine and expected; an admission is a different thing and can undermine the defence being funded on your behalf. Take the details, be decent about it, and let the process do the rest.

From there the arrangement provides financial coverage for the award and the legal work behind it. Our part is to place the notification properly and keep you told about where it stands, rather than leaving you to chase an insurer you have no relationship with.

If the matter touches advice rather than an incident, it moves across to a professional indemnity arrangement and a different notification applies.

Frequently Asked Questions