All You Need To Know About Employee’s Compensation Insurance In Hong Kong

In Collaboration With CCW

If you’re an employer in Hong Kong, the Employee’s Compensation Insurance is mandatory for your employees. That Hong Kong law, under the Employees’ Compensation Ordinance, Cap. 282, states that any person or business employing any individual in any capacity must take out an insurance policy to satisfy their liabilities towards workers who may suffer an injury in the routine course of their employment.

It doesn’t matter how long you have employed someone, or the length of their contract, or even the hours they work – both part-time and full time, contracted and temporary workers are covered under the Employee’s Compensation Ordinance. The type of insurance designed to fill this legal requirement is called Employees’ Compensation Insurance, or just EC Insurance.

What Is The Employee Compensation Insurance?

The Employee Compensation Insurance is a mandatory insurance for employers which covers their responsibility if an employee injured himself, while performing its duties, in the work premises. It’s a type of Hong Kong Insurance product which has been designed to fill the requirements with the Employees’ Compensation Ordinance, Cap. 282.

Under Hong Kong law the minimum levels of coverage are:

• HK$ 100 million for employers with fewer than 200 employees.
• HK$ 200 million for employers with more than 200 employees.

If an employee suffers a work-related injury in the normal course of their employment, then the insurance policy will compensate them with a financial settlement. This settlement factors in both the severity of the injury and the lost earnings of the employee due to the injury.

Who Needs Employees’ Compensation Insurance?

According to the Employees’ Compensation Ordinance, any and all employers in Hong Kong need to obtain EC Insurance. This means that companies and businesses need Employees Compensation Insurance, as do individuals employing domestic workers. In fact, many maid insurance products in Hong Kong will provide EC insurance to employers of domestic helpers as part of the standard scope of coverage.

No company or employer is exempt from the requirement to obtain Employee’s Compensation insurance. If you pay someone to do any job then you are, legally, required to hold this type of insurance policy.

What Are The Penalties For Not Having EC Insurance?

If you are an employer without Employees’ Compensation Insurance coverage in Hong Kong then you are liable to a fine of up to HK$ 100,000 and imprisonment for a term of up to two years. Additionally, any employer found guilty of not satisfying the Employees’ Compensation Ordinance will be required to make a surcharge payment to the Employees Compensation Assistance Fund Board.

It is important to note that the Hong Kong Labour Department will routinely conduct spot checks to ensure that businesses and employers are complying with all relevant local EC insurance regulations.

How To Get The Employee Compensation Insurance For Risky industries?

In some cases, depending on the industry or sector you operate in, it may not be possible to purchase insurance through regular channels. This is due to the fact that traditional insurers view some industries as being inherently risky and dangerous, and can decline to offer coverage.

This obviously contradicts the requirement under Hong Kong law that all employers obtain comprehensive Employee’s Compensation Insurance, and can be stressful to certain high-risk businesses. The good news is that the Hong Kong government operates the Employees’ Compensation Residual Scheme Bureau.

The ECRSB allows individuals and businesses who have been declined cover by at least 3 separate insurers, or which have been quoted premiums in excess of 30 % of standard market rates, to receive the necessary protection required under law.

Get A Free Employee Compensation Insurance Quote With CCW Global

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