What are the basics of business insurance in China?

General insurance provides coverage in every situation where an accident may occur. We help our clients to mitigate risks they may face through insurance coverage. We combine an international and local expertise. In today’s episode I will be talking about the basics of business insurance in China.

In terms of business insurance in China, what is considered a loss?  

  • The amount an insurance company will pay for damages to property covered under the terms of the insurance policy.
  • In order to be considered a loss, these damages must have occurred as the result of an accident.
  • In business insurance in China, an accident is deemed to be something that occurred in an unforeseeable event, or in an event that occurred suddenly and/or was out of your control.
  • This includes all kind of accidents caused by third parties, natural disasters, credit defaults and even cyber attacks.
  • A business insurance company in China will replace the damaged items through either a cash payment or by replacing the damaged piece of property.

What is a business insurance claim in China?

A claim made by the holder of an insurance policy to request payment for the damaged piece of property.

What should the insured business in China do in the event of a loss?

  1. When an accident occurs, the insured must take all reasonable and necessary measures to limit the damage being caused. Through trying to control or minimize the extent of the damage. In the event of a fire, using a fire extinguisher.
  2. Once the damage is done, restricting access to and preserving the site of the accident as much as possible. Also, the insured party should take pictures of the site.
  3. Notify in writing your insurance company in China as quickly as possible. Fill out an insurance claim application and explain the nature of the accident, the date and time of the accident, and the description of the cause of the loss. Also, if possible give an estimation of the cost of the loss.
  4. Once the above steps are completed, you can begin the indemnification process.

What should the insurance policy holder do in case of having to make an insurance claim in China?

  1. Once the insurance company confirms that the loss is covered, the insured can begin to lodge a claim.
  2. To lodge an insurance claim in China it is necessary to submit the original copy of the policy and the claim application form.
  3. On the claim application form you must list the items of property that were damaged, along with their original invoices.
  4. You must also include the certificate of technical appraisal to certify the extent of the loss. This will be provided by the repair company who, prior to carrying out the repair, will make an assessment on the extent of the loss.
  5. The invoices of repair expenses must be provided.
  6. Certificates issued by government or relevant authority. For instance, in the event of suffering a loss caused by a storm or a flood. The insured business in China must obtain a certificate from the weather bureau corroborating that the cause of the damage occurred in the mentioned place at the mentioned time.
  7. In the event of a fire in a business in China, it must be reported to the local fire brigade service who will issue a certificate attesting to damage caused by fire.

This article is based off my Daxue Talks interview. Daxue Talks, is a show powered by daxue consulting, a China-based strategic market research company founded in 2010. Watch the full interview below:

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