Frequently Asked Questions about
The Employees' Compensation Ordinance, Cap. 282

Compulsory Insurance
 
Q1. Are employers obliged to take out employees' compensation insurance policies for all employees?Answer
Q2. Is it necessary for an employer to take out an employees' compensation insurance policy for his part-time local domestic helper?Answer
Q3. What should an employer take note of when taking out an employees' compensation insurance policy?Answer
Q4. Is an employer required to notify his insurer when his employee sustains a work injury?Answer
   

   
Content
   
Q1. Are employers obliged to take out employees' compensation insurance policies for all employees?
A1.

According to section 40 of the Ordinance, no employer shall employ any employee in any employment unless there is in force a policy of insurance to cover their liabilities both under the Ordinance and at common law for injuries at work in respect of all their employees, irrespective of the length of employment contract or working hours, full-time or part-time employment. Should there be any queries on legal liability, employers should seek professional legal advice.

The minimum insurance cover should be for an amount:

No. of Employees Amount of Insurance Cover per Event
not more than 200 not less than $100 million
more than 200 not less than $200 million

An employer who fails to comply with the Ordinance to secure an insurance cover commits an offence and is liable on conviction to a maximum fine of $100,000 and imprisonment for two years .

Moreover, under the Employees' Compensation Assistance Ordinance, Chapter 365 of the Laws of Hong Kong, an employer who fails to comply with the compulsory insurance requirement is liable to pay a surcharge to the Employees Compensation Assistance Fund Board.

For any information concerning the list of insurers underwriting employees' compensation insurance, please click here to access to the relevant website of the Hong Kong Federation of Insurers.

For information concerning the extended insurance coverage to the Shenzhen Bay Port Hong Kong Port Area, please click here to access to the relevant website of the Office of the Commissioner of Insurance.

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Q2. Is it necessary for an employer to take out an employees' compensation insurance policy for his part-time local domestic helper?
A2.

According to section 40 of the Ordinance, no employer shall employ any employee in any employment unless there is in force a policy of insurance to cover their liabilities both under the Ordinance and at common law for injuries at work in respect of all their employees, irrespective of the length of employment contract or working hours, full-time or part-time, permanent job or temporary employment. Hence, an employer must take out an employees' compensation insurance policy for his part-time local domestic helper as required by the law.

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Q3. What should an employer take note of when taking out an employees' compensation insurance policy?
A3.

When taking out an employees' compensation insurance policy, an employer should take note of the following statutory minimum insurance cover :

No. of employees Amount of Insurance Cover per Event
Not more than 200 not less than HK$100 million
More than 200 not less than HK$200 million

IMPORTANT NOTE

The minimum amount of insurance cover specified in the Ordinance is not the maximum liability that the party concerned is required to bear under the Ordinance and at common law. The party concerned should therefore carefully assess the possible risk and consult insurers for professional advice on whether an insurance policy for an amount more than the minimum under the Ordinance should be taken out.


The following points should also be borne in mind:

  • No deduction should be made from the earnings of an employee for defraying the cost of taking out employees’ compensation insurance policies;
  • Ensuring that all employees are covered by the insurance policy and that when the number of employees increases, the employer should notify the insurer accordingly as soon as possible;
  • Giving a detailed declaration to the insurer on the annual earnings and job duties of individual employees;
  • Listing the usual work locations of employees;
  • Stating specifically those employees who are required to work outside Hong Kong or take overseas business trips;
  • Stating specifically whether any work is sub-contracted to sub-contractor and stating clearly whether the employees of the sub-contractor are covered by the policy; and
  • Bewaring of the expiry date of the insurance policy and taking action to renew the insurance policy in advance to ensure that the insurance cover is not interrupted and to avoid contravention of the Ordinance.

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Q4. Is an employer required to notify his insurer when his employee sustains a work injury?
A4.
  • Other than reporting to the Commissioner for Labour, an employer should also notify the insurer as soon as possible, within the stipulated period and in the specified format (in writing or by specified form) required by the insurer, when his employee sustains a work injury;
  • The employer should also keep a record of the periodical payments (i.e. payments for sick leaves for work injury) paid to the injured employee, the original copies of the Certificate of Compensation Assessment (Form 5) and the Certificate of Assessment (Form 7) issued by the Labour Department, medical certificates and receipts in respect of medical expenses properly; and submit the relevant documents to the insurer within the stipulated period and in the specified format required by the insurer for indemnifying the amount of compensation already paid to the injured employee; and
  • On receiving any legal documents, including an order or a summons issued by the court, the employer should notify his insurer the soonest possible or seek legal advice.

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