What insurance is required by law in Hong Kong?

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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 3^rd 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 3^rd 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 3^rd Party Insurance certificate. This is due to the fact that Vehicle insurance is the 2^nd 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.