Month: August 2021

18Aug

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.

10Aug

Cyber Insurance Outlook in the Next 5 Years

The need for cyber insurance has grown especially with the business shifts that occurred due to the pandemic. Remote work and the increasing technological and operational demands of businesses has also highlighted the importance of insurance for any type of business.

Given the current state of Asia (and the world), here are our predictions for the next five years for insurers as well as businesses in terms of managing cybersecurity.

Immense industry growth is ahead.

Most if not all businesses agree that there will be an increase in cyber insurance premiums. Standard & Poor’s Corp. stated that they foresee an increase of 20% to 30% per year on average in cybersecurity premiums.

The recent hacking at Colonial Pipeline resulting in a US$4.4 million ransom makes a strong case for companies to revisit and evaluate their current online security and the lack of infrastructure in place to protect them from such breaches.

A Standardized Cyber Insurance Cover

Cyber insurance covers differ in limits, features, and terms. At the moment, these variations are not fully intentional and is a normal part of the industry’s process of learning and adapting. Having said that, this current state also poses challenges for policyholders who may not understand which policy they need for their business. It also results in issues for reinsurers in evaluating their exposure to varied risks.

We see a more stable outlook in 2025 with the language and terms used for cyber insurance. As the market hardens, policy providers have already avoided ambiguous terms that may result in confusion for the insured.

In addition, regulations for cyber insurance will be more mature and regulatory bodies will enforce higher standards of information collection and will require regular reporting about cyber risk exposure.

Flexible Policies As the Norm

COVID-19 has taught many providers that rigidity and failure to adapt can do plenty of damage. As a solution to the current and very likely future events, we predict policies that offer monthly premiums or credit plans for add-on features based on regular reevaluated risks as well as incentives for taking preventative actions.

Cyber Insurance Providers Will Have Dedicated Cyber Risk-driven Models

Hackers will continuously find more and more ways to breach systems alongside the efforts to reduce cyber attacks. This means more complicated and highly dynamic risk assessment models for insurance providers in the foreseeable future.

A huge cyberattack is always impending and it can very well happen before 2025. Knowing this reality, we foresee providers investing in dedicated talents who specialize in cybersecurity to provide comprehensive risk models.

Companies worldwide have now been propelled to enter and quickly grasp a fast-moving and highly digitized facet of business transactions.

Alternative and cyber insurance products will become more interesting, flexible, and specialized. The task at hand for insurance providers is to innovate and design the right products to bridge market gaps that leave businesses exposed to the next attack.

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Need help finding the right insurance plan for your business in Hong Kong? Contact us today.

7Aug

Infographic: The Cybersecurity Shortage

The projected loss from cyber attacks worldwide is forecasted to be in the trillions in 2021. With many companies shifting to virtual offices – some even permanently – malware, phising, and other forms of data breaches will most likely increase. However, data shows that there’s an alarming gap between the need for tighter cybersecurity and the number of organizations that understand its importance.

The infographic below provides impactful statistics and proposals to shorten the gap.

Sources:

https://www.varonis.com/blog/cybersecurity-skills-shortage/

https://www.protectwise.com/post/survey-suggests-younger-generations-including-females-may-fill-the-cybersecurity-talent-gap/

https://www.varonis.com/blog/cybersecurity-statistics/

2Aug

Understanding the Risks of Managing an e-Commerce Business and the Insurance You Need

E-commerce has had a huge impact in Asia even throughout the pandemic. People have been able to buy and purchase products overseas sans a physical store. The requirement of having a brick-and-mortar store has taken a backseat for many small business owners as well as large retail corporations.

And as is the case with anything emerging, the industry’s growth brings with it new risks that may not have existed a decade ago.

The fact that the e-commerce industry is growing at an incredibly fast pace is yet another reason for online retailers to make sure that they are protected from the many risks that can come with such rapid growth. According to recent studies, e-commerce sales increased to $4.058 trillion in 2020 and made up more than 14% of total worldwide spending.

Covid-19 has played a crucial part in this growth with lockdown and physical restrictions that encourage consumers to shop online.

So what are the risks involved?

1. Cybersecurity – e-commerce is one of the most targeted industries of cyber attacks, with 32.4% of all cyberattacks targeting this industry. Ecommerce stores are known to hold highly sensitive information such as a  buyers’ credit card information and home address.

Online shopping sites are liable for these types of breaches which can result in millions of dollars worth of lawsuits, especially for large companies. Having the right cyber insurance is a must-have.

2. Product Liability – Any product or service can malfunction and result in some form of injury or accident. Defective products or the lack of hazard warnings are grounds for legal liability even if you’re not the direct manufacturer. Online retailers have to remember that as long as you are part of the distribution chain, you may be deemed responsible.

Some companies have been opting to get insurance called Technology Errors & Omissions Insurance. This type of insurance combines product liability and cyber insurance, therefore addressing incidents involving physical injuries caused by a product, and the unauthorized disclosure of proprietary information, respectively.

Aside from product liability insurance, it’s recommended that companies purchase D&O insurance to have an added cover for directors, officers, and other decision-makers in the company in case of lawsuits.

3. Intellectual Property Issues – Copied designs and the use of copyrighted material (even if one does it unknowingly) can lead to legal problems for e-retailers. In fact, an e-commerce store can face liability related to a third party’s ad that’s seen on its website. A general liability insurance can cover these issues.

If your business keeps and receives shipped goods in a warehouse via a third-party provider, or if you ship your products directly to customers and other distributors, then cargo insurance may also be something to consider. This insurance covers your business from loss of inventory while in storage or shipping.

Need more information about the insurance you need for your e-commerce business? Get in touch with us today.