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Hong Kong businesses affected by vandalism and arson during protests seen filing up to HK$600 million in insurance claims

Insurance claims related to arson, vandalism and loss of business due to anti-government protests may have reached nearly HK$600 million (US$76.5 million) " the third highest in Hong Kong's history, surpassing the HK$325 million related to Sars (severe acute respiratory syndrome) in 2003.
The claims related to the current protests, however, do not come close to those filed after damages caused by Typhoon Mangkhut, which saw a HK$3.1 billion in overall claims, according to data from Hong Kong Federation of Insurers.
The super typhoon hit Hong Kong on September 16 last year, leading the city's weather observatory to issue its highest typhoon warning, the No 10 signal, for 10 hours. The storm left a trail of destruction across the city, damaging property and felling at least 46,500 trees. Typhoon Hato, in 2017, saw claims worth HK$858 million.
Protesters have targeted rail operator MTR, mainland Chinese banks such as Bank of China (Hong Kong) and ICBC " and businesses with links to China or whose owners support Beijing.
The MTR alone may seek HK$100 million as it has borne the brunt of protesters' ire. They have set fire to entrances of almost all its stations and vandalised property. Banks and shops may claim another HK$100 million to rebuild their outlets, branches and ATMs, according to an insurance expert who did not want to be named.
He added that there might be another HK$400 million of claims related to losses such as business interruption " which covers hotels, shops and banks " if operations had been affected due to property damage or other issues. Organisers of concerts and exhibitions that have had to cancel events and travellers who have been affected by the protests were also likely to file claims.
Chinese banks have also been targeted and vandalised by anti-government protesters. Photo: K.Y. Cheng alt=Chinese banks have also been targeted and vandalised by anti-government protesters. Photo: K.Y. Cheng
The protests began in June over an extradition bill, which was formally withdrawn last week. They have weighed on retailers, restaurants and tourism-related industries as increasingly violent clashes with police have discouraged people from eating out and visiting the city. As the unrest has intensified, tourist visits to Hong Kong have collapsed.
"MTR Corporation has taken out property insurance for MTR stations and related facilities. The corporation has submitted claims to the insurance companies for assessment and handling," a MTR spokesman said, but declined to disclose the sum involved.
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Bank of China (Hong Kong) could not be reached for comment.


Broken office windows are sealed up with wooden panels at One Harbourfront in Whampoa, Hung Hom after Typhoon Mangkhut hit Hong Kong on September 16, 2018. Photo: Roy Issa alt=Broken office windows are sealed up with wooden panels at One Harbourfront in Whampoa, Hung Hom after Typhoon Mangkhut hit Hong Kong on September 16, 2018. Photo: Roy Issa
Snack chain retailer Best Mark 360, which has seen 59 shops vandalised in the social unrest, was discussing compensation with its insurance company, according to a stock exchange filing last week. The snack chain with about 100 shops in Hong Kong said it might have to bear losses if the insurer declined to cover the entire cost of the damages.
"The terms and conditions of some insurance policies will provide coverage for loss arising from strike, riot and civil commotion (SRCC), whilst others will specifically exclude it," an Insurance Authority spokeswoman said.
Chan Kin-por, a lawmaker representing the insurance sector, said most large companies will have comprehensive property insurance policies covering fire and other damages caused by SRCC.
"Property insurance taken out in recent years will include SRCC cover. After the 2014 Occupy Central movement, most companies and insurers have understood that Hong Kong could face the risk of social unrest," Chan said.

Bhawani Rath, chairman of Confederation of Insurance Brokers, said some major Hong Kong insurance brokers have seen their clients submit claims related to the recent protests. He added the claims may lead to higher premiums for companies seeking insurance cover in the future.

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