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Q:
What insurance is required by law in Hong Kong?
A:
Many people are surprised to learn that there are only two
types of insurance that are legally
required in Hong Kong; Employee’s
Compensation insurance and Vehicle Insurance.
We frequently speak about Employee’s Compensation insurance
here on Ask CCW – no wonder, because it is one of two types of insurance that
is required by law!
Really simply put, if you employ someone (in any capacity to
do any job, including yourself) then you must have Employees’ Compensation
Insurance to cover your liability towards that employee suffering an accident, injury,
or illness in the routine course of their job duties.
From Domestic Helpers to CEO’s, everyone in Hong Kong who
takes a salary needs to be covered by Employees Comp. The Labour Department
runs spot checks to ensure that businesses have taken out this type of
insurance, and Domestic Helpers (along with self employed individuals) will be compelled
to submit proof of coverage as part of their immigration requirements.
As we’ve covered Employee’s Compensation fairly extensively
in some of our other Answers, we’ll look at the other type of mandatory insurance
product in Hong Kong: Vehicle Insurance.
When we say “Vehicle” insurance we’re actually talking about
two different types of policy Car Insurance
and Marine Hull Insurance. Both of the minimum coverage requirements will
operate in much the same manner, as will the licensing processes to check that
the legal obligations are being met.
All vehicles in operation in Hong Kong, whether it is a
private car, a motorbike, a fleet of taxis or lorries, a corporate junk, or a
container ship, must be at minimum covered for their 3rd
Party Liability Risks.
Any vehicle must be protected against its financial liability
towards the risk of causing damage, destruction, or death to third party
property or individuals in the wake of an accident. There are different coverage
minimums with respects to boats and land vehicles, but the principle is the
same.
When you go to license your car at the transport department
you will need to provide a certificate of insurance proving that you obtained 3rd
Party Vehicle Insurance coverage. You cannot provide a receipt of payment, a
letter from your insurance broker, or an email from the insurer confirming
coverage. The only acceptable documentation is the original 3rd
Party Insurance certificate. This is due to the fact that Vehicle insurance is
the 2nd type of legally required insurance in Hong Kong and is
involved in a regulated process.
All other types of insurance in Hong Kong are generally
taken up on an as-needed basis, or will form the part of a contractual
obligation between a vendor and customer, or a renter and a landlord, or a bank
and a mortgage holder. None of these products are legally required, but they
may be contractually mandated as a routine course of doing business.
Many banks, for example, will not finalize a mortgage until
a Fire
Insurance policy has been obtained on the property. This is not a legal
requirement, there is no law stating that mortgages cannot be obtained without
fire insurance, but this is a business decision on the part of the bank with
which the mortgagee must abide.
Should you have any further questions about any type of Hong Kong Insurance please feel free to Ask CCW! Remember, we’re simplifying
your insurance.
Answered on: 23 April, 2019 00:05
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