Guide to choosing insurance for a small business

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If you are about to start a small business or startup, do not forget to look into and set up insurance policies. Often overlooked, business owners, especially in Hong Kong, may think that it is irrelevant for their specific niche, but this couldn’t be further from the truth. In this piece, we will be breaking down the different types of insurance you should consider adding to your insurance portfolio.

Let’s dive right in

Liability Insurance

This is probably the most well-known type of insurance employees consider when starting a business. Although laws in Hong Kong may differ, protecting yourself against any litigation is a must for risk management. There are different types of liability insurance. Here is a simple breakdown:

Public Liability

This is a critical insurance policy which will protect you from any third party litigation. For example, if an employee or customer slips on your floor and sustains ay type of injury you may be sued. Having a good public liability insurance policy, or LPI will protect your company against litigation around the personal injury as well as property damage.

Keep in mind that some things are not covered such as contamination or damages because of a contract, but you can add additional coverage if your company requires. This call all be arranged by a trusted insurance company, like Trusted Union.

Commercial Insurance

Similar to PLI this insurance would cover your commercial industry from niche-specific issues. The premium is determined by risk. A restaurant will naturally carry more risk than a business office, due to fire, greater fall potential or cutting injuries from knives etc.

Professional Indemnity Insurance

Although most people disregard this type of insurance as they equate it with malpractice lawsuits only, the word “professional” is actually a very broad term. This umbrella term really includes an array of professions that should acquire professional indemnity insurance. Here are just a few examples:

  • Medical Practitioners
  • Legal
  • Real Estate Agents and Brokers
  • Fitness and Sports Trainers
  • Consultants
  • Investment Professionals

Each of these professions, among others, is mandated by law, to provide a certain level of care. Any breach within that parameter could result in litigation. Choosing good coverage will protect you from various lawsuits.

A good policy should cover any legal fees, including defence and court costs which can be very expensive. They also will pay for any bonds that need to be posted, expert witnesses, and other costs that may accrue.

Worldwide coverage is also an important consideration. In today’s digital age, most if not all business is handled almost exclusively online. Consider the types of lawsuits that can ensue in regards to copyright infringement defamation and breach of privacy. Each of these has become more and more pressing with the increase in online shopping, social sharing, and content.

Take Away

If you are starting or have already started a small business do not forget to get the right insurance to protect your company and yourself from serious litigation. Lawsuits, unfortunately, are common and waiting until it is too late can shut down your business and potentially your career. Companies like Trusted Union, that specialize in protecting ex-pats in Hong Kong should be consulted for the best coverage choices that are right for your niche.



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