Can home insurance cover the damage to "Teletubbies"?

A child accidentally leaned against a large "Tin Tin B" display in a toy shop, causing the figure to subsequently fall and shatter. The parents immediately compensated the shop with over HKD 30,000. Later, upon reviewing the footage, the parents discovered that their son did not kick the figure down but merely leaned on it lightly, causing it to fall. Ultimately, the toy shop apologised and refunded the amount.

We can consider some scenarios to explore whether insurance can provide protection by transferring risks for shops and consumers. If the business has purchased property insurance for the shop, it is likely that they can claim compensation from the insurance company even if a customer damages an expensive product.

Taking a step back, suppose the customer genuinely damaged the shop's property due to their own negligence. If they have home insurance that provides "Global Personal Third-Party Liability Coverage" for themselves and their family, including property loss outside the home, they could transfer the compensation liability for the damage caused to "Antenna Baby" to the insurance company.

Taking AIG萬家寶Plus - Enhanced Comprehensive Home Insurance as an example, its terms state that it provides "Legal Liability Coverage" for the insured and their family members. This includes legal liability for personal negligence causing bodily injury or property damage to third parties worldwide (including the United States/Canada), subject to Hong Kong law, with a maximum compensation limit of HKD 1,000,000.

OneDegree Home Insurance also covers compensation for bodily injury caused to third parties or accidental property loss belonging to third parties by the insured and their family members. The compensation amount ranges from HKD 10,000,000 to HKD 15,000,000, provided that the incident occurs in Hong Kong, or the insured liable for legal responsibility has not stayed consecutively in other countries or regions for 30 days, and a court with judicial jurisdiction determines the legal obligation to pay the amount.

FWD Home Insurance also specifies that if the insured or family members are liable for legal responsibility due to negligence resulting in bodily injury or property damage to others, and monetary compensation is required, the litigation must be handled by a Hong Kong court, with a maximum compensation limit of HKD 5,000,000.

Additionally, Zurich Insurance's Customised Home Insurance Plan – Occupier’s Insurance provides up to HKD 10,000,000 in legal liability coverage for the insured and household members. This includes personal global liability, not limited to responsibilities as an owner, occupier, pet owner, or tenant, as well as the owner’s liability for common areas.

However, it is worth noting that not all home insurance policies provide compensation for personal legal liability outside the home. Therefore, policyholders seeking such coverage should carefully review the terms of the insurance product. In the future, we will also conduct a comprehensive comparison of terms related to home insurance.

In fact, it is not easy for policyholders to claim legal liability insurance from insurance companies, as it involves complex procedures. It is advisable to pay attention to and follow the seven points or steps below to ensure a smoother claims process:

• Check whether your policy covers the relevant claim item, the maximum compensation limit, and whether a deductible applies.
• Do not engage with any third parties or admit liability to any third party.
• If property damage is involved, report the incident to the police and file a case.
• Contact the insurance company and provide them with the police reference number to facilitate their investigation and determination of the compensation amount.
• Do not discard any damaged items, as the insurance company may need to inspect them as part of the claims process.
• Submit the completed claim application form and relevant documents within the specified number of days from the date of the incident.
• If the matter ultimately leads to legal proceedings and the merchant wins the case against the policyholder, the compensation should be covered by the insurance company.

Lastly, although home insurance is nominally for protecting the home, its actual coverage extends beyond just the home and resembles personal property insurance. Consumers who wish to enquire about the details of home insurance coverage are advised to seek professional advice from insurance agents and brokers or to contact the insurance company directly for enquiries.

Note: This article was last updated on 24 May 2022.

This English version of this article has been generated by machine translation powered by AI. It is provided solely for reference purposes. In the event of any discrepancy or inconsistency between this translation and the original Chinese version, the Chinese version shall prevail.