28Dec

Five Tips for Making A Business Preparedness Plan

After a calamity, maintaining your business requires more than good fortune and hope for the best. When the unexpected occurs, a solid business preparedness plan may help you keep your doors open and resume regular operations.

Although nobody can anticipate whether or when a disaster will occur, it is preferable to take preventative measures to safeguard your business. Consider these five stages when building a business preparedness strategy and plan ahead:

1. Establish program management

Everyone on the premises, including people with disabilities, must have their physical safety considered part of your preparedness strategy. You’ll also want to create instructions for continuing business with minimal disruptions.

– Create a department or group that will be responsible for creating and updating your business continuity strategy.
– Set aside money for any backup plans the group comes up with. (This may involve discussing with your agent whether your small business insurance coverage meets your needs.)
– Determine any laws or corporate rules that might impact your plans.

2. Gather information about hazards and assess risks.

This should involve figuring out which events are more likely to happen in your areas, such as whether your company is situated in a flood or typhoon-prone area.

Do a business impact analysis to ascertain the likely effects of a business disruption. Then, examine and take into account strategies for risk reduction and loss mitigation.

3. Determine resources and train staff on how to implement those plans.

Make a plan to help ensure your business has all the resources it needs on hand by evaluating what resources you might need in the event of a disaster, from personnel to communications equipment to other needs.

In the event of an emergency, be prepared to communicate critical information to your staff, clients, and other stakeholders. Make a plan for how you’ll access your electronic data and information technology systems in the event of an emergency.

4. Conduct a test run.

To assess how well-versed and effective your employees are in the plan, conduct a variety of exercises. The evaluation of the established plans and procedures and the personnel training on their responsibilities may benefit from this phase.

5. Update and improve your plan based on the test run.

Review your plan bi-annually or once a year. Then, ensure your employees are reoriented with any changes in your plan. Keep in mind that any significant adjustments to the business or its personnel may necessitate a review of the emergency plan.

If you need additional coverage for disasters, taking note from the COVID years, we recommend getting in touch with us so we can help you find a plan that fits your evolving business needs in Hong Kong.

4Feb

Infographic: Three Examples of D&O Insurance Claims

We recently discussed the increased risks for directors and officers in the time of COVID in our last blog. We also shared questions that both companies and insurers should be asking while in the process of developing new products to answer the emerging needs attributed to the pandemic.

We recommend reading that blog to appreciate the value of purchasing a D&O policy or at least revisiting your current insurance plan to evaluate if it’s enough to protect your company for a possibly huge loss.

Below are examples of claims for D&O from three different types of business:

20Jan

The Increased Risks for Directors & Officers in the Time of Covid

The COVID-19 pandemic has led to significant financial and operational damages in various business sectors around the world.

Many companies have reported drops in revenue at the end of 2020 with foreseen losses continuing this year. Some have need to stop all commercial activities altogether, let go of employees and sell company assets in order to maintain cash flow.

In addition, many businesses have shared that they have received numerous requests for the renegotiation or termination of initial contracts with some requests leading to litigation given the shifts in some employee duties and tasks.

In this context, it is easy to picture conflicts involving directors and officers liability – for instance, with respect to their selection of loss-mitigation actions which may later result in a loss of revenue.

In such situations, it can be difficult to determine which damages were actually because of the company’s decision-makers or which were solely a consequence of the pandemic.

Insurance providers are facing the same challenges as their policyholders. In Asia, insurers have taken the steps to determine the new risks for managers and executives.

There’s increased risk for directors and officers  – thus the need for more comprehensive D&O Insurance policy because of the following:

Company directors may be held liable for losses when they cannot supply customer demand due to COVID-19. Threats of litigation over a supply chain disruption are quite possible for large losses.

Lay-offs, non-payment of disability pay, and loss of employee healthcare have been a reality for many companies. This opens directors and officers to lawsuits for wrongful termination or breach of contract on a massive scale.

In the event of essential businesses that require employees to come to work instead of working from home, decision-makers may also be liable when members of their operations staff get sick with the virus. This is especially a liability risk if the company is found negligent of observing proper health protocols.

Watch this 2-minute video to further understand the value of a D&O insurance policy:

In complicated situations such as the current pandemic, directors and officers are held to higher standards of diligence. Their jobs require careful calculations, planning and strategising. There should be a great consideration for the risks of fraud and other unlawful acts.

Thus, the expectation from managers increases simultaneously with the level of severity of a situation in which their decisions are regarded.

As 2021 progresses, more questions have arisen about the scope of a manger’s or director’s responsibilities. What’s certain is that last year’s events have forced companies to troubleshoot unique situations with plenty of uncertainty on how to do so.

 

5Jan

Insurance Industry Outlook for 2021

What changes will the insurance industry undergo with the lessons learned from 2020? What transformations are to be expected?

Here are some of our insights:

The pandemic and ensuing economic fallout essentially shifted consumer and employee needs, practices, and expectations, while pushing digitization of insurer operations quite quickly. But while most of those in the industry adjusted, insurers are will likely face lingering challenges to growth and profitability this year.

A survey by Deloitte with 200 insurance providers reported that 48% of executives recognised that the pandemic proved how unprepared most providers were to endure this type of economic storm. The same survey also showed that only 25% out of the 200 strongly agreed their providers had “a clear vision and action plan to maintain operational and financial resilience” during the crisis.

The pandemic gravely resulted in a loss for the property-casualty bottom line. This is attributed to massive event cancellations and employee compensation claims.

Given the crisis’ impact on jobs, business transactions, and trade, global non-life premiums were flat for the entirety of 2020, including a 1% decline in advanced markets. [1] However, despite these roadblocks, the industry may yet recover to 3% growth in 2021, led by a possible 7% boost in emerging regions.[2]

Non-Life Insurance Are Forecasted to Recover in 2021

At a regional level, total insurance premium growth in advanced regions and China will be more positive than GDP, mostly driven by non-life insurance. This is mainly due to government support under the rural revitalisation strategy and rising risk awareness. The growth pullback in advanced markets will be less, but we anticipate the largest annual contraction of close to 1% in premium volumes terms throughout this year.

INTERESTING LEARNING: While it was assumed the pandemic might boost consumer awareness about the value of life and health insurance, a J.D. Power study discovered that was not the case. Despite the fatalities in the US with over 300,000 deaths, consumers did not seem any more motivated to get life insurance. This behaviour was due to a combination of scarce client communications and a continuing perception of high-cost and transaction complexity. [3]

Product developments will likely shake-up traditional offers. This is an opportunity for insurers to innovate based on emerging trends and needs.

New types of covers such as the launch of more parametric policies or “index-based insurance” (which pays out on the occurrence of an event rather than having to claim a specific insured property loss). This was observed as the top product development priority among North American and European providers and number three in APAC. The concept, which has already been growing in popularity in property-catastrophe insurance, might have use for future viral outbreaks.

Lloyd’s of London recently introduced a parametric business interruption policy for small- and medium-sized firms suffering IT disruptions.

WHAT CAN BE DONE BEYOND 2021?

Insurance providers must take steps to manage three key phases of the COVID-19 crisis

1. Respond
2. Recover
3. Thrive

When the pandemic hit, insurers reacted by taking critical steps to ensure business continuity and help clients and their communities cope. As we all head into 2021, insurers should consider a mix of offense and defense-based actions to hasten long-term recovery efforts and pivot to the thrive phase when growth is most needed.

References:

[1] Swiss Re Institute, “World insurance: Riding out the 2020 pandemic storm,” Sigma No. 4/2020, July 2020.

[2] https://www.deloitte.com/xe/en/insights/industry/financial-services/financial-services-industry-outlooks/insurance-industry-outlook.html

[3] BusinessWire, “Life insurance customer satisfaction flatlines despite pandemic fears, J.D. Power finds,” accessed November 4, 2020.

7May

Cost of Investing: Tips and Must-Know Info

Investment, in the most basic sense, is all about sacrificing something now for the greater good of the future. The payoff depends on many factors and does not solely rely on how much you invest. However, like all cases, there will always be underlying costs and trades that you should be aware of before jumping right into it.

Vigilance is important. You need to learn to foresee possible changes and learn to handle intangible costs. All of these will have a huge impact on how your seeds will be cultivated, and how your money will grow. Investment is volatile. The more you throw yourself into it and always “touch” it, the more you will be bound to lose it. The last thing you want to do is losing much more than earning. Expenses can be dangerous, even more so when they are misunderstood and aren’t given enough preparation

Here are life-saving tips for everyone who ever braves the waves of investment.

The first blood

They say every move you make these days costs a lot. It gets so severe that spending is forever, and is inevitable as much as breathing. You begin investing with the idea of saving money. A lot of funds can help you out with that. But which is the best? Without any idea, you jump into your favourite bank but suddenly they come clean and tell you that you have an initial fee, which can sometimes be bloated to 5 per cent. It is important to land with the best choice and settle with an adviser who can offer entry funds without costs.

Severing Ties

Basically, any corporation holds policies on exit fees to compensate for the loss of your account being terminated. It’s a little harder to find providers who offer expense-free exit fees, but always be aware of this and ask about the details right away.

The bitter truth

There’s no skirting around the edges on this one. There will always be expenses when it comes to investing. The most positive outcome around it would be to MINIMISE expenses so not a lot would be lost. Investments should be kept simple and transparent. Period.

The magic word

“Reduction in yield” is the key. Never forget. Chances are, if you’re planning to purchase an insurance-linked investment product, there will be a lot of loopholes that they will try to get over your head. Basically, reduction in yield shows the overall effect of changes to a policy. You will be able to predict how the percentages will hit your investment. Some establishments don’t open this freely and will only be revealed if you asked, so it’s equally important as other pointers.

Annual management fees

You have to pay the man. It’s not exactly easy handling other people’s investments. Again, the best choice is to settle with an investment that can have the lowest fees possible. Some cases have fees exceeding two per cent every year, and that isn’t good.

Protect your investment with the right insurance. We help find the best covers for expats and businesses in Hong Kong. Get in touch with us today.

30Apr

Singapore or Hong Kong? Where Best to Do Business

Singapore and Hong Kong are two of the best east Asian countries to start establish a business. Hong Kong has taken the lead for the past years but Singapore has been quickly making great strides to compete further.

Companies and brands from the US and UK have had relatively easy entries to both markets. The most common business has to do with building a regional headquarters for a global company as an expansion strategy and amass the Asian market.

HERE ARE HELPFUL INSIGHTS FOR EXPATS WHO ARE CHOOSING BETWEEN HONG KONG AND SINGAPORE TO DO BUSINESS.

As an overview of the two country’s strengths:

  • Singapore has the top destination for maritime trade.
  • Hong Kong is your choice if the objective is to eventually start business in Mainland China.
  • Both have incredibly accessible international airports with hundreds of direct flights from Western regions on a daily basis

LEGAL PROTECTION

It’s a must to have business cover like public liability or product liability insurance. It’s a pre-requisite for any business in Hong Kong and Singapore.

Both countries have strict legal systems with regulations in place to help you with intellectual property rights and dispute resolution departments. However, Singapore wins over Hong Kong in terms of enforcing contracts and property registrations.

GLOBAL RANKINGS

World Bank’s 2017 Ease of Doing Business ranking places SG at #2 and Hong Kong at #5. New Zealand was #1 last year.

In the annual Z/Yen survey of global financial centres Hong Kong beats Singapore but as the entry way to China, Hong Kong is the 3rd most powerful financial hub globally. Singapore is currently in 4th place.

Hong Kong ranks 1st in terms of financial services and financial technology.

The criteria for the rankings above are:

  • infrastructure
  • business environment
  • financial sector development
  • human capital
  • reputation

Business registration can both be done online via website registration.  The headline Singapore tax rate is 17% whereas it’s 16.5% in Hong Kong. There are also many tax exemptions available for both.

In Singapore, one of the directors must be a citizen while Hong Kong allows 100% ownership by expats.

Ready to get started with your new businesses? Get in touch with us for all your business insurance needs.

19Dec

Employer’s Guide to Employee Compensation Insurance in Hong Kong

 

Employee Compensation Insurance or EC Insurance is a liability cover specific for businesses with hired workers. This is mandatory in Hong Kong for all businesses.

According to Section 40 of the Employees’ Compensation Ordinance, Chapter 282 of the Laws of Hong Kong, no employer shall employ any employee in any employment unless there is in force a policy of insurance to cover their liabilities both under the Ordinance and at common law for injuries at work in respect of all their employees, irrespective of the length of employment contract or working hours, full-time or part-time, permanent job or temporary employment.

This ordinance also applies to domestic helper insurance but will vary in cost and coverage.

An employer who fails to comply with the Ordinance to secure an insurance cover commits an offence and is liable on conviction to amaximum fine of HK$100,000 and imprisonment for two years.

MUST-KNOW FOR EMPLOYERS

  • Minimum insurance cover

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  • Full cost of insurance CANNOT be deducted from your employees’ earnings. A breach in this ordinance makes the employer liable to a fine of $10,000 and 6 months imprisonment.
  • When you add more employees to your business, make sure you contact your insurance provider to discuss any adjustments.
  • Ask if the Employee Compensation Insurance covers subcontractors. You are not required to take out a policy for them as there is another type of insurance they can arrange for themselves. You can read our blog about being an expat contractor in Hong Kong here.
  • Take note of sick leaves and medical expenses in case an employee is injured during work.

Some information for Employers and Employees

Employee Compensation Insurance covers the following:

  • medical care from injury or illness
  • replacement income (start date may vary)
  • costs for retraining
  • compensation for any permanent injuries
  • benefits to survivors of workers who are killed on the job
  • policy does not cover pain and suffering
  • some policies can cover long term and permanent injuries
  • volunteers workers may also be covered by some policies

Once an employee makes a claim, they forfeit any chances of pursuing a legal complaint against the company.

FOR A QUOTE OR MORE ANY QUESTIONS ABOUT THIS INSURANCE, FILL UP THE FORM HERE: Employee Compensation Insurance Quote

14Jun

Infographic: Global Cyber Attack Statistics

The threat to cyber security has increased over the past 10 years. Businesses have paid large sums to recover files and systems which all could have been avoided if we only treat cyberattacks as a big possibility. Here are the numbers on cyber attacks on global businesses.

Ask us how we can help your business with the proper insurance cover.