With Anglo East Insurance, securing your workforce means securing your future. We handle the complexities of ECI so you can focus on growth, embodying our commitment to protecting your ‘money and honey.’
Premium calculator Talk to expert!
Employees’ Compensation Insurance (ECI) aims to protect employees in cases where they are injured or fall ill as a result of their work during employment. According to the Hong Kong Employees’ Compensation Ordinance, all employers, even those with only one employee, must purchase Employees’ Compensation Insurance. This mandatory requirement ensures that both the employer and employee are adequately protected in the event that an employee becomes incapacitated due to work-related injury or illness.
Employees’ Compensation Insurance covers any employee who is injured or falls ill due to work-related activities. For businesses employing fewer than 200 employees, it is mandatory to purchase policies of at least HKD 100,000,000 to ensure the employer is no longer liable for costs and damages arising from workplace injuries or illnesses to employees.
Important Considerations:
When completing the insurance application, it is crucial to precisely detail the job tasks of the related employee. ECI rates are based on the job classification of each employee, and accurate information helps ensure reasonable premiums and adequate coverage.
Subcontractors must ensure they hold a valid Employees’ Compensation Insurance policy and provide relevant proof to the main contractor.
Failure to display a notice of insurance may result in a fine of up to HKD 10,000.
Despite the strict legislation around Emplovees’ Compensation Insurance, there are some scenarios where you may be exempt legally from carrying out the act:
Although it seems that purchasing Employees’ Compensation Insurance is worthless because you know your employees are highly unlikely to injure themselves, it can come in handy in the following examples to remind you of how important it is:
This was a case where Mr. Lo Siu Wa was injured while performing construction work for his employer, Novo. Novo had not registered Mr. Lo as an employee, and therefore their corresponding ECI insurers did not believe they were liable to pay the claim.
After visiting courts at the request of an appeal by Mr. Lo, it was ruled that Mr. Lo was considered an employee of Novo. Had Novo not been insolvent, their liability might have been rejected by their underwriters, AXA, for misrepresentation. However, as a result of the Employees’ Compensation Ordinance Cap 282, AXA was compelled to pay Mr. Lo his compensation.
Failure to comply with the ordinance is liable to a fine of up to HKD 100,000 and imprisonment of up to two years, if found guilty, as well as potentially being forced to pay a surcharge to the Employees’ Compensation Assistance Fund.
In situations where an employer becomes aware of a work-related injury or illness, they are expected to file a report with the Commissioner for Labour and the insurer providing the coverage. The employer is expected to keep detailed records of the incident and the compensation actions for the insurer.
Underinsurance is the concept of buying insufficient insurance at the expense of being improperly indemnified in the event of a claim.
So should an employer not purchase sufficient insurance then insurers will not be obliged to pay out the full sum that is warranted by the loss.
Being underinsured loses the principle of an ease of mind, where those whom are underinsured are more likely to have to set aside funds in the event of any claim so that they still go back to the same situation as before in being indemnified.
This principle brings the same problems for those that are partial or total loss due to the average condition, where both types have claims that are paid out proportionately to the amount the total sum insured that the client has.
An employer whom does not comply with the Ordinance to secure an appropriate ECI cover are to be held liable to pay a surcharge to the Employees’ Compensation Assistance Fund Board according to the laws of Hong Kong and pay compensation under the Employees’ Compensation Ordinance and at common law.
Lloyd’s is not an insurance company but rather a marketplace. Therefore, Lloyd’s is a society of members who collectively underwrite through entities known as ‘syndicates’. Due to Lloyd’s oversight of the market and the central financial resources available to policyholders, rating agencies have rated the Lloyd’s market as ‘Strong’, ‘Excellent’, and ‘Very Strong’ respectively, indicating that it offers first-class security for its clients. Lloyd’s is an authorized insurer in Hong Kong under the Insurance Companies Ordinance (Cap. 41).
By virtue of Lloyd’s licensed status in Hong Kong, Lloyd’s syndicates are permitted to delegate underwriting authority to insurance brokers or agents located in Hong Kong through binding authority contracts. Such intermediaries holding a binding authority from Lloyd’s are known as ‘coverholders’.
Each coverholder must obtain central approval from Lloyd’s before they can be issued with a binding authority. Anglo East Group has been duly approved by Lloyd’s to act on behalf of Lloyd’s underwriters.