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FAQ > Employer Obligation > E03

Q: What should an employer take note of when taking out an employees' compensation insurance policy? View : 53
A:

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

• For the no. of employees of a company not more than 200, The amount of insurance cover per event should not less than $100 million.
• For the no. of employees of a company more than 200, The amount of insurance cover per event should not less than $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 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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