A survey of SMEs and large corporations in the market found that many companies are likely to seek business liability and professional indemnity insurance only after a disruption has occurred.
For example, of businesses experiencing customer fraud or fraudulent payments via the internet, two thirds (65%) took action afterwards.
Likewise, 60% of businesses that had sensitive data stolen via the internet and 46% that had business systems or computers hacked took action after the fact.
“What this means is that by waiting until after the fact to protect themselves, they are missing out on any compensation for the initial event and in the process potentially putting business stability in jeopardy,” QBE Hong Kong CEO Mark Walker said.
Besides business interruption, the most frequently encountered risks encountered over the last 12 months include equipment breakdown (23%); legal and regulatory compliance issues (21%); and staff injuries while working (20%).
“Quite frankly, it is alarming that companies are not seeking to better protect themselves through business liability and professional indemnity insurance given all the risks and challenges that exist out there,” Walker said.
“In an increasingly litigious world, with professional liability moving up on the agenda, Hong Kong‘s companies need to be encouraged to do more to protect themselves and their customers.”
The survey results do indicate that nearly all (93%) of Hong Kong respondents have some form of business insurance, but only 67% are aware of business liability cover and less than half (47%) have taken out this form of insurance.
Hong Kong business leaders meanwhile believe that technological innovation (23%), rising expectations for personalized customer services and products (22%) and a continued business slowdown (20%) are the most important trends for their business in the next 12 months.
The major challenges they are facing include business cost reduction (40%) and customer retention (37%), customer acquisition (35%), talent acquisition (34%) and business profitability (34%).