Business activities
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Business Activities include the following industries:

Office / Retailer/ Shop / Property Management / Hotels / Shopping Mall / Manufacturer/ Logistic Company / Trading, Exporter and Importer
    (A) Business Activities – Trading / Manufacturing
    (B) Business Activities – Construction / Renovation
    (C) Business Activities – Freight Forwarder’s / Warehousemen
    (D) Business Activities – Medical Practitioners / Engineers / Accountants / Architects / Lawyers/ Insurance Consultants / Financial Advisors
    (E) Business Activities – Directors in any corporation

(A) Business Activities – Trading / Manufacturing

Property All Risks Insurance
This insurance is designed to protect the Insured’s Real &/ or Personal Property from loss or damage resulting from perils such as:
    Fire & Lightning
    Explosion (excluding boiler explosion)
    Smoke Damage
    Strike , Riot, Civil Commotion, Vandalism &/ or Malicious Damage
    Typhoon, Windstorm and full flood &/ or Rain and Fresh Water Damage

    Sprinkler Leakage
    Bursting or overflowing of water Tanks, Apparatus or Pipes
    Vehicle and Aircraft Impact

It can be arranged on an:
    (a) “All Risks” basis but always subject to standard common exclusions or
    (b) “Named Perils” basis as stated above

Business Interruption / Loss of Profit Insurance
If the Business carried on at the Insured’s premises be interrupted or interfered with in consequence of any loss or damage insured under the Property Damage Insurance, this insurance will indemnify the insured all financial against all financial losses suffered as a result.

It can be arranged on:

     (a) Gross Profit Basis or
     (b) Gross Earning Basis 

Fidelity Guarantee Insurance

Fidelity implies the faithful or loyal performance of a duty, and a fidelity guarantee policy is an insurance against the results of dishonesty or disloyalty.  The policy will indemnify the employer against direct pecuniary loss, and in many cases, loss of stock sustained through acts of dishonesty by an employee without showing names or positions. this is the most common type of coverage form.

Money insurance

This will pay the amount of any loss of:
    (a) Money which shall mean cash bank notes, currency notes, cheque ( other than pre-signed blank cheque whether crossed or
          uncrossed) postal and money orders and current postage stamps belonging to the insured or for which insured is responsible.
    (b) or damage to any safe or strongroom belonging to the insured caused by the theft or attempted theft.

The cover can be arranged for:
    (a) Money in transit
    (b) Money in Premises

Electronic Equipment (Computer) Insurance
Although Computers & Electronic Equipment can be covered under property Damage Insurance , due to its uniqueness and high value nature, it is more appropriate to cover it under a Computer/ Electronic Equipment Insurance which extends cover to internal break down.
The cover is normally arranged as follows:

(a) Computer/ EDP Hardware
    This covers loss or damage to the Computer by sudden and unforeseen damage. Coverage include damage caused by external perils or
     internal breakdown.

(b) Data Media
    This covers loss or damage to data media by sudden and unforeseen damage including the cost of reinstatement/ reconstruction of

(c) Increased Cost of Working / Extra Expenses
      This covers additional expenses incurred, including use of alternative hardware, airfreight, overtime etc.

(d) Consequential Loss
      This covers the loss of profit on standing charges arising out of physical loss or damage to hardware & media.

Machinery Breakdown Insurance
This insurance will indemnify the insured against unforeseen and sudden physical loss or damage to the machinery insured from causes such as defects in casting and material, faulty design, faults at the workshop or in erection, bad workmanship, shortage of water in boilers, physical explosion, tearing apart on account of centrifugal force, short-circuit, storm, or from any other cause not specifically excluded under the policy.

Machinery Breakdown Business interruption Insurance
Following a machinery breakdown, if the business carried on by the Insured at the premises specified is interrupted or interfered with in consequence of an accident, the Insurer shall indemnify the Insured against the amount of loss from such interruption or interference.

It is a requirement that must be a Machinery Breakdown policy in force and also that before any amount of loss is payable there must be a physical damage to the machine itself and the amount of such damage is recoverable under the Machinery Breakdown policy.

Employees' Compensation Insurance
This is a statutory insurance cover. The insurance will indemnify the Insured against its liability at law and will pay for compensation and claimant’s costs and expenses in respect of bodily injury by accident or disease caused during the period of insurance to any employee arising out of and in the course of employment.

This policy covers the “worker” as defined under the Workmen’s Compensation Act as well as those not defined under Act (with the benefit of an endorsement) . It also covers employees on oversea business trips and can be endorsed to cover employees travelling to and from work and meal breaks.

Motor Insurance
A standard motor provide cover under two main sections:

Section I
“Own Damage”. This section will indemnify the Insured against loss of or damage to the vehicle and its accessories.

Section II
“Third Party Liability”. It is a Statutory Requirement that all car owners must effect insurance to protect his liability at law. This section will indemnify the Insured against all sums including claimant’s costs and expenses which insured shall become legally liable to pay in respect of Third Party Death or Bodily Injury and or Property Damage.

(a) Comprehensive Cover: Own damage of the Insured vehicle is covered which includes loss or damage due to Fire and Theft. Third Party
      Liability is also provided. Strike, Riot & Civil Commotion (SRCC) cover can be purchased by paying additional premium.

(b) Third Party Fire & Theft Cover: Under the own damage section, it will only for loss or damage resulting from fire, self-ignition, lighting,
      explosion, theft or attempted theft. Third Party Liability is also provided.

(c) Third Party Only Cover: This is a very limited cover limited cover merely to fulfill the statutory requirements. Coverage is not provided for
      damage to the insured’s vehicle.

Pleasure Craft Insurance
This insurance indemnifies the Insured against loss or damage to the vessel, liability to third parties or any expenses incurred in
connection with the vessel. Coverage is subject to all clauses stated in the schedule.

Marine Cargo Open Cover insurance
Marine Cargo Insurance is arranged to protect cargos of infinite variety, while they are in transit by various means of transport, such as by Land, Sea or Air, to and from most places in the world. Coverage is subject to Institute Cargo Clauses.
In general, covers can be purchased in one of the following forms:

1) “A” Clause
     It covers for “All risks “ of loss or damage to the cargos, except for perils specifically excluded.

2) “B” Clause
    It covers for loss or damage to the cargos arising from named perils as stated in the clause only, as well as losses arising from washing
    overboard, during loading or unloading, earthquake, volcanic eruption or lightning.

3) “C” Clause
    It covers for loss or damage to the cargos arising from named as stated in the clause only.
     By market practice all marine policies exclude cover for war risks and the risks of strikes, riots and civil commotions, but these may be        
     covered subject again to Institute War and strikes Clauses.
     Common Practice in the market is for the insurer to issue an “ Open Policy”. This document is a master policy which sets out in detail the
     nature of the cargos to be covered, the mode of transport, the geographical area within which the cargo movements are covered, the limit        of the underwriter’s liability for any one consignment, the period of time for which the contract is valid and the terms and conditions of the          insurance. The Insured is required to make declarations to the underwriter on a monthly basis, the previous month’s shipments.

Goods-In-Transit Insurance
This insurance covers loss or damage to cargo while being carried on land by means of any land conveyance. Covers can be arranged on “All Risks” or on “Named Perils”. In general, the perils insured against are fire, flood, collision and over-turning of the carrying vehicle or derailment in the case of a train.
This policy can be extended to cover “FOB” shipments, in which case the risks of loading and unloading on board the vessel or aircraft are covered.

Products Liability Insurance
Products Liability insurance is often underwritten in combination with Public Liability Insurance whereby it will indemnify the Insured in respect of all sums the Insured shall become legally liable to pay for compensation in respect of bodily injury and property damage to Third Parties caused by the fault or negligence of the Insured. There is however, an added requirement that the injury or damage must be caused by the nature, condition or quality of any products sold or supplied by the Insured. Coverage for charges, expenses and legal costs are also provided.

(B) Business Activities – Construction / Renovation

Contractor’s All Risks Insurance
This insurance provides “All Risks” cover, subject to stipulated exclusions, in respect of both temporary and permanent works while in the course of construction and until handed over by the contractor to the principal. This insurance is usually arranged as follows:-

Section I
    (a)  Reinstatement/ Replacement of the Works, Temporary Works / Buildings and the Construction Materials all other properties belonging
           to the Insured or for which they are responsible.
    (b)  Professional Fee of Architects, Surveyors and Consulting Engineers incurred in the reinstatement of the insured property.
    (c)  Cost of Debris Removal, Dismantling and/ or demolishing, shoring up or propping of the damage property.

Section II
This section will indemnify the Insured in respect of all sums which the Insured shall become legally liable to pay in respect of:
    (a) Accidental bodily injury to Third Parties
    (b) Accidental damage to Third Parties properties

Arising out of the performance of the contract described in the schedule.

Construction Consequential Loss insurance
A major insurable loss, for example, a major fire on the construction grounds, would undoubtedly cause a significant delay in the completion of the project thus resulting in increased debt servicing costs to the Insured. Policy cover losses in respect of :
    1) Reduction in Gross Revenue
    2) Increased in Cost of Working
    3) Reduction in Interest Earned
and may be extended to include delays due to damage at suppliers’ premises thus preventing key items or equipment, such as lifts and air-conditioning units, from being delivered on time.

Erection All Risks Insurance
This policy covers loss or damage during the supply, design, delivery, installation, erection, completion , testing and commissioning of the erection works and other equipment, accessories and all ancillary works including inland transit, loading and unloading anywhere in Hong Kong SAR.

Performance Bond
This Insurance protects against the unfulfilled obligations of the terms of Contract by the Insured. It is basically. It is basically a contract bond to guarantee the completion of the contract in accordance with the plans and Specific, including payment of all bills and liens.

Contractor’s Plant and Machinery Insurance
This is basically a property “floater” insurance covering the Contractors’ plant and machinery namely tractors, bulldozers, cranes, scaffolds, concrete forms, hand and power tools etc. Coverage can be on “All Risks “(subject to standard policy exclusion) or on “Named Perils”. Policy can be extended to cover inland transit within Hong Kong SAR.


(C) Business Activities – Freight Forwarder’s / Warehousemen

Freight Forwarder’s / Bailee’s Liability Insurance
Freight forwarders generally fall into two categories i.e those forwarding as Principals under a House Bill of Lading or as actual Hauliers and/or Warehouseman and those acting merely as Agents for shippers, who issues the actual Carriers’ Ocean Bills of Lading, Hauliers’ Consignment Notes, Warehousemen’s receipts etc. According to which category they operate under, their liability exposure varies.

When forwarding as a Principal ( e.g NVOC), the Freight Forwarder’s name is on the Contract of Affreightment i.e your House Bill of Lading. He will therefore be the first in line for a claim in the event of loss or damage to the cargo. It is very important therefore that the terms of the Bill of Lading he issues, incorporate certain terms and conditions which allow him limited liability in a similar way to a Ship-owner.

Liability acting as an “agent” or sub-contractor
A freight Forwarding Agent, working for a Shipper, is in a less vulnerable position simply because he is merely acting on behalf of the shipper and is passing on the Contracts of Affreightment issued by actual Carriers. His exposure is limited in most cases to responsibility for making mistakes in giving shipping instructions etc. or issue of documentation. For example, shipping goods to wrong destination or incorrect completion of customs forms.

Naturally, if a Freight Forwarder operations his own Warehouse and/or Haulage Service using his own vehicles, than his liability becomes one of an actual Bailee. He would therefore most likely be liable for any loss or damage to cargo in his care, custody and control, as there is no other Carrier involved for that stage of the transit.

All Freight forwarders whether shipping cargo by land, sea or air have an exposure to their Carriers in the event that any of their shipments should cause delay, loss or damage etc. to the conveyance, which , in the case of an aircraft, can prove extremely expensive.

When cargo is damaged, the cargo interest will claim against the issuer of the Bill of Lading which usually limits the liability of the Freight Forwarder to certain amounts per package/unit or any one incident. However, if a competent Court should decide, that Bill of Lading limits cannot be relied upon, a judgment may be made for the full amount of repairs or replacement of the cargo and even for Consequential Loss, Arising from such loss or damage.

Warehousemen’s & Carrier’s (Bailee’s ) Liability Insurance
This coverage will protect the warehouse operator/ transport operator against claims of negligence resulting from loss or damage to goods while they are in the warehouse operator/ transport operator’s care, custody and control. It also covers for liability arising out of direct physical loss or damage to property whilst transit.

(D) Business Activities –
Medical Practitioners / Engineers/ Accountants/ Architects/ Lawyers/ Insurance Consultants/ Financial Advisors

Professional Indemnity Insurance
This policy indemnifies the Insured against any claim arising from breach of professional duty, negligent act, error or omission, committed or alleged to have been committed by the Insured, the predecessors or the employees. All reasonable litigation costs and expenses incurred are also covered.

(E) Business Activities – Directors in any corporation

Directors and officers liability Insurance
Company Directors and Executive Officers are responsible to their company, the shareholders, the employees and the Companies Act (Cap 50) limit the extent to which a company can indemnify its directors and officers.

As such, the D&O policy is designed to cover damages and legal costs from personal liabilities arising from negligent advice or misstatement, ultra vires acts, unauthorized payment, failure to disclose full extent of director’s interest, failure to comply with statutory requirements, breach of duty etc.
The D&O policy, together with an extension on Company Reimbursement, will provide coverage of defense costs necessarily incurred
to indemnify the individual directors and officers.

To indemnify the company reimbursement granted to individual directors and officers, as permitted by law, on account of any claim first made against him/her, these individuals have become legally obligated to pay.

As each business is faced with risks that are unique to their operations, we recommend that these be reviewed regularly to ensure that scope of cover provided by your Insurance Programme is appropriate for your needs.

Note: The above list is not exhaustive and does not include all types of policies available in the various insurance markets. Also, availability of some classes will be subject to prevailing market conditions.

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