20Apr

COVID-19 Common Liability Concerns for Businesses

While the vaccine rollout in Hong Kong is ongoing, COVID-19 still raises several liability concerns for customers or employees who may become sick due to alleged negligence by an organization.

For these types of concerns, it’s necessary to take the following insurance considerations into account:

– Commercial liability insurance— protects your business from financial loss should you be found liable for personal harm (like a customer getting sick) caused by your product or services, or due to business operations in the case of employees. This general liability insurance can cover costs correlated with bodily injuries, damage to third-party property, personal injuries, medical expenses, litigation and more.

In the time of COVID, commercial liability insurance should provide coverage and allow organizations to defend claims. For a claim to be valid, the claimant would have to claim that the virus was contracted due to the organization’s or business’ oversight and detail how, when and where they got sick—all of which may be difficult to prove.

– Directors and officers (D&O) insurance— Shareholders can sue a business in case there’s a failure to respond competently to COVID-19 concerns. Specifically, shareholders may dispute that Directors and Officers failed to plan for adequate contingency plans or detail how the pandemic could affect the company’s finances.

Here’s a recent blog we published with examples of D&O Claims.

It should be noted that most D&O insurance excludes cover for bodily harm but may offer some protection depending on specific accusations. That said, it’s important for businesses to examine the scope of their D&O insurance to verify that they are covered in the event of such events.

EMPLOYEE’S COMPENSATION INSURANCE

In events when an employee makes a claim that they contracted COVID-19 at work, a number of employee compensation factors come into play. For workplace illnesses, most policies only pay out benefits if the disease in question is occupational in nature. This may imply that communicable diseases are generally excluded from most employee compensation policies.

However, a policy may be triggered if the illness came about during the course of employment. Generally, these scenarios are reviewed on a case-by-case basis but could include instances for:

> Healthcare workers who contract COVID-19 at the hospital where they work.

> An airline employee contracts COVID-19 from a passenger.

> A hospitality employee gets COVID-19 that can be linked to a large event at their place of work.

Poor insurance cover or the lack of any type of cover that specifically addresses your business’ liability with COVID will deter you from making meaningful recovery this year. Although there is some positive outlook on financial recovery in Asia, this should not be the time to loosen one’s sense of cautiousness.

Need to update your company’s liability insurance? Get in touch with us today.

18Apr

What You Should Know About the Revised Compensation Items Under the Employee’s Compensation Ordinance in Hong Kong

A Resolution was passed at the Legislative Council meeting last March 17th, 2021 to change the levels of compensation of nine (9) compensation articles under the Employee’s Compensation Ordinance. This is a compulsory provision and all employers must comply.

Employers will have additional liability starting April 15, 2021.

What you should know:

> Your insurance provider will have to charge an additional premium estimated at around 2% of the initial cost up to the end of your Employee Compensation Insurance policy.

> Additional gross premium will be acquired.

> Additional gross premium less than HK$200 will be waived

> Employees’ Compensation Insurance Levies & Premium Levy (if applicable) will be charged on top of additional gross premium

Items under the Employees’ Compensation Ordinance

The increased levels of compensation will enhance the protection for employees injured at work or sufferers of occupational diseases as well as family members of deceased employees or persons who die of work injuries or occupational diseases.

For more information about how the new ordinance will affect your current policies, get in touch with us today.