Published on: 22 June 2022 by Michael Lamb
It’s a simple truth of life that even with the greatest of care and attention, an activity or project can be completely derailed by a small mistake or error. No matter how good you are at something, or how much expertise you have at doing a job, accidents and mishaps will occur.
This is true of all professions. From lawyers to plumbers – no matter how good you are at doing something it is possible to have an “off” day. It’s pretty easy to understand when a plumber has made a mistake, and assess the damage caused by that mistake; the water flooding your kitchen and damaging your appliances is immediate and obvious, and your flooded possessions have a clear price tag.
A plumber will normally have public liability coverage to protect against their risk of damaging customer’s property. But what happens for businesses and companies that don’t deal with providing a physical service?
What happens when advice causes a loss, or is claimed to have caused a loss?
Professional Indemnity is to white collar businesses what Public Liability or Contractor’s All Risks is to blue collar professionals.
One of the biggest threats to any business which “advises” customers is being on the receiving end of a negligence claim. If after giving advice to a customer that person suffers a loss, which they feel was due to your business or employees not working to the best of their abilities, then your business could be on the receiving end of legal action – the aggrieved party is likely going to try and recover their loss and blame the whole situation on you.
Simply defending against a negligence claim can be time consuming, distracting, and incredibly stressful. The business still has to continue operations and existing clients still need to be serviced.
Professional Indemnity Insurance was designed for these situations. Also known as P.I. Insurance, Malpractice Insurance, or Errors and Omissions Insurance, this type of cover is designed to assist with and cover your legal costs in defense of a negligence claim. This type of insurance provides expansive white collar risk management for businesses; many professional indemnity insurance products can include cover for:
This gives any business extremely wide-ranging cover against a majority of the “professional” risks they face. Contracts can be breached by well-meaning but uniformed workers. The same is true of defamation and libel, especially if your organization lets interns handle the social media.
These risks are not as ever present or “in-your-face” as considerations like Property Damage or Personal Injury, where there is the issue of physical harm and loss. With Professional Indemnity most of the damage and loss is going to be purely financial in nature, and demands a more bespoke form of protection.
While the only universally required form of business insurance in Hong Kong is Employee’s Compensation cover, depending on the industry you are operating in certain regulatory requirements may necessitate the purchase of an PI Insurance policy alongside your EC protection.
Having said that, Professional Indemnity Insurance can be invaluable to any business which offers advice or provides professional services. Examples of types of companies which would benefit from Professional Indemnity Insurance include:
These are just a few of the many diverse types of businesses which can benefit from the security offered by Hong Kong Professional Indemnity Insurance coverage.
Professional Indemnity Cover is an important product for any company that isn’t manufacturing a physical product, or doing some form of physical work for a customer. But it only covers a small portion of the risks faced by a company, whether in Hong Kong or overseas.
Service Industry businesses should strongly consider supplementing their Professional Indemnity protection with additional coverages, some of which can be bundled into packages within your PI policy.
Required by law for all employers in Hong Kong this is the only mandatory form of business insurance for all companies in the city, no matter what industry it may be operating in. Employee’s Compensation Insurance, also known as EC insurance, covers an employers liability at law towards employees who suffer an accident during the routine course of their job.
To learn more about this type of protection please click Employees’ Compensation Insurance in Hong Kong.
Office Contents Insurance protects the physical assets of your workplace against loss or damage. From your stock in trade through to confidential client documents and computer systems, your office contains a wealth of valuable property and data. Supplemental to a Professional Indemnity policy, this type of insurance ensures that you will be able to replace your physical office assets should you suffer a claim event.
To learn more please click Hong Kong Office Contents Insurance.
Almost an extension of Professional Indemnity insurance, Director’s and Officer’s cover (also known as D&O insurance) protects a company against any directors or senior officers of the organization performing “wrongful acts.” From breaches of trust, through to misstatements or even criminal acts, D&O insurance protection ensures blanket protection from the behavior and actions of senior staff.
For more information, please click Hong Kong Directors and Officers Insurance.
CCW Global offers a wide range of business insurance solutions. From SMEs to MNCs, our expert Hong Kong Insurance brokers understand the risk landscape of 21st century business and can help your team best identify the coverage solutions best suited to your needs.
With bespoke business insurance products from leading Hong Kong and International underwriters, CCW Global is able to advise on most types of business insurance product and ensure that your company is as protected as possible.
For more information about CCW Global, the Hong Kong business insurance products we offer, or to arrange a no-cost, no-obligation consultation about how we can best help you please Contact Us today.