Insurances in China
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What are the primary considerations for establishing a North America sales and business development presence?
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Having the right company insurance in China gives you more than just a good night's sleep. It is fundamental to the protection and management of your business. It's hard to get the equilibrium right too: some will try to get away with minimal insurance, whereas others will overindulge on insurance they don't really need. The easiest way to evade this is to consult an expert. They will advise you on the appropriate insurance for your company in China.
Paying insurance premiums is always going to appear onerous, but can you really afford to be without sufficient coverage? More importantly, can your company afford it? This is especially true to setting up a business in China. As a foreign business, you are susceptible to infractions, accidents, even disasters, which you will not be accustomed to in the UK. You only have to look over the past few years to see how many people in both the East and West that have been afflicted by natural disasters.
It is advised you seek out a reputable insurance broker, who will not only be able to recommend the exact insurance needs for your company, but also compare deals and negotiate cost-effective packages. They will also be able to inform you of any legal requirements that you may not be aware of.
Generally, there are four main types of insurance:
- Vehicle Insurance
- Public Liability
- Building and content insurance
By law, all vehicles must be insured to a third party liability level in China. There are two predominant policies to choose from: third party and comprehensive insurance. If a claim is made against you for personal injuries and legal costs, then third party injury insurance is required.
Comprehensive vehicle insurance covers damages caused to your own car by you, as well as injury, property damage, fire and theft.
This type of insurance in China covers you and your employees in the event of sickness, accident or illness.
An employer must provide accident or sickness cover for their employees. However, self-employed people are not covered by employee compensation, and therefore need to cover themselves through a private insurer. There are various types of insurance available, such as income protection, trauma, life and disability.
Public Liability Insurance
This is a compulsory form of cover in China, and protects from claims by third parties against negligence, death, injury, loss and damage of property, and economic or financial loss.
Building and Contents Insurance
This insurance in China covers your property and its contents and/or stock against fire, water and other damages such as earthquakes, lightning, storms, explosions, burglary and theft.
There are a handful of insurances in China that are tailored to meet your day-to-day needs and cover you in the event of damage or injury to yourself or other persons, as well as assets and property.
It is recommended that you think about insurance in China at the earliest possible stage. Part of the mortgage agreement will be that an insurance policy is purchased. Home Insurance in China will generally cover the contents of your home in the event of fire, water damage, theft and vandalism. The cost of home insurance generally depends on what it would cost to replace your home and exactly which additional contents you have insured alongside it. In this instance, home insurance is particular to each case, as opposed to universal.
Home insurance in China will invariably exclude earthquake insurance, so make sure you seek out comprehensive earthquake cover.
All vehicles must have, at the very least, third party liability insurance. However, in China, third-party only covers in the event of death and bodily injury. You will probably want something more comprehensive than this, so do shop around before settling for something inadequate.
Expatriates are entitled to the same treatment as all other Chinese people.
However, it is strongly recommended you take out a private insurance policy. A normal insurance policy will cover the fees for GP and hospital visits and outpatient care. Dental visits and treatment are not usually covered by basic schemes. As the insurance market of China is competitive, it is recommended you find one that is well-priced and suits your needs.
Life insurance isn't just something to think about when you reach old age. In fact, the earlier you take it out, the better deal you get. Insurers are more likely to give a better deal to someone who is young and healthy than old and ill. Even if you have no family or dependents to worry about, there are still very good reasons for you to invest in life insurance.
Life insurance isn't really a country-specific affair, like health or vehicle cover is. It is tailored to your individual circumstances and needs.
It is important to know the kinds of life insurance available to you in China. Typically, these are term/temporary insurance and investment/permanent insurance.
Term insurance invariably provides compensation and benefits to a family or dependent in the case of death within the terms outlined in the policy. It ensures that, in the instance of death, the people you leave behind are not left in financial turmoil.
Investment-type insurance will be inclusive of endowment and 'whole of life' policies, and is valid for as long as premium payments are made. Technically, part of the premium is invested and will build in value. It can even be cashed before you die. Therefore, the earlier you buy, the more will accumulate, the more you can reclaim.
It is essential to remember, that, when looking for a life insurer, you shop around. It is imperative that you get a deal to suit your needs. So, with this in mind, not only are you looking for a good price, but a suitable, individual policy. Ask yourself what you need from a life insurance policy. There are many people that can help you deduce which company and policy is most appropriate for you, and there are many price comparison sites located on the internet.
Organisations that can assist with Insurances
Sovereign offers a range of advisory and support services to assist companies of all sizes to establish successful business operations in foreign markets.
We can find business insurance advice for you. Professional indemnity insurance and international business insurance