EMPLOYEE COMPENSATION INSURANCE:
DEFINITION, COVERAGE, BENEFITS, COST, CLAIMS

Employee compensation insurance, also known as workers’ compensation insurance, is a type of insurance that provides financial protection to employees who suffer work-related injuries, illnesses, or death. In Hong Kong, it covers medical expenses, lost wages, rehabilitation costs, and compensation for permanent disability or death resulting from workplace incidents or occupational diseases. Employee compensation insurance is mandatory under the Employees’ Compensation Ordinance (Chapter 282) in Hong Kong.

Legal Compliance: The Ordinance mandates that all employers in Hong Kong, regardless of the number of employees or industry, must obtain this insurance to cover their employees, including full-time, part-time, and casual workers. Failure to comply is an offense, with penalties including fines up to HK$100,000 and imprisonment for up to two years.
Employee Protection: The insurance ensures that employees injured or disabled at work, or who contract occupational diseases, receive fair compensation for medical costs, income loss, or other damages, promoting employee welfare and financial security.

In summary, employee compensation insurance is a legal requirement in Hong Kong to safeguard both employees and employers, ensuring financial support for workplace injuries while maintaining compliance with labor laws.

What is the minimum insurance coverage required for ECI in Hong Kong?

In Hong Kong, the minimum insurance coverage required for Employee Compensation Insurance (ECI) is stipulated under the Employees’ Compensation Ordinance (Chapter 282). The minimum coverage requirements are as follows:

For employers with 200 or fewer employees: The insurance policy must provide a minimum coverage of HK$100 million per event for liabilities arising from workplace injuries or occupational diseases.
For employers with more than 200 employees: The minimum coverage increases to HK$200 million per event to account for the higher potential risk and number of claims.

These amounts cover liabilities such as medical expenses, lost wages, compensation for permanent disability, or death resulting from work-related incidents. Employers must ensure that their ECI policy meets or exceeds these minimums and is obtained from an authorized insurer licensed by the Hong Kong Insurance Authority.

It’s critical for employers to verify that their policy complies with these requirements, as non-compliance can lead to fines of up to HK$100,000 and imprisonment for up to two years. Feel free to contact EverBright for more detailed consultation!

Who is required to purchase ECI and who are covered under ECI?

Under the Employees’ Compensation Ordinance (Chapter 282) in Hong Kong, the following entities are required to purchase Employee Compensation Insurance (ECI):

All Employers: Any person or entity that employs individuals under a contract of service or apprenticeship in Hong Kong, whether full-time, part-time, temporary, or casual, must obtain ECI. This includes:
- Businesses, regardless of size or industry (e.g., corporations, SMEs, sole proprietorships).
- Individuals employing domestic helpers, such as maids or drivers, in a private household.
- Contractors or subcontractors employing workers for specific projects.
Principal Contractors: If subcontractors are engaged, the principal contractor may also be required to ensure ECI coverage for the subcontractors’ employees unless the subcontractor has valid ECI.
Government Exemption: Certain government employees may be covered under separate schemes, but private employers working on government contracts must still secure ECI for their workers.

ECI policies in Hong Kong cover the following individuals for work-related injuries, illnesses, or death:

Employees Under a Contract of Service or Apprenticeship: This includes:
- Full-time and Part-time Employees: All workers employed directly by the employer, regardless of hours worked.
- Casual or Temporary Workers: Individuals hired for short-term or irregular work, such as event staff or seasonal workers.
- Domestic Helpers: Maids, drivers, or other household staff employed in private households.
- Apprentices and Trainees: Individuals under formal training or apprenticeship agreements.
Employees Working in Hong Kong: Coverage applies to employees performing work in Hong Kong, regardless of their nationality or residency status (e.g., local or foreign workers).
Employees Injured Abroad (in Certain Cases): If an employee is a Hong Kong resident and their work-related injury occurs outside Hong Kong while performing duties directly related to their employment, they may still be covered, subject to policy terms and legal provisions.
Subcontracted Workers: Employees of subcontractors may be covered under the principal contractor’s ECI policy if the subcontractor lacks valid insurance, depending on the contractual arrangement.

What types of diseases, injuries or incidents are typically covered by ECI?

Employee Compensation Insurance (ECI) in Hong Kong, provides no-fault coverage for personal injuries by accident arising out of and in the course of employment, as well as incapacity from prescribed occupational diseases listed in the Ordinance's Second Schedule. This ensures employers' liabilities for medical expenses, lost wages, permanent incapacity, and death benefits are insured.

Coverage requires the injury (including death) to result from an accident—a sudden, identifiable event—arising out of (caused by employment risks) and in the course of (during employment time, place, or related activities) employment (Section 5).

Typical Covered Incidents:
- Workplace accidents, such as falls from heights, machinery malfunctions, or slips on site.
- Injuries during business trips or work duties outside the office.
- Deemed "in the course of employment" for commuting in specific cases:
  - Travel via employer-operated or arranged transport (not public service).
  - Direct route home-to-work using employer-provided vehicle.
  - Travel during typhoon signal No. 8+ or red/black rainstorm warnings (within 4 hours before/after work).
  - International travel for work purposes.
Injuries Outside Hong Kong: Covered if the accident arises out of employment duties and the employee seeks treatment in Hong Kong or as policy allows.
Psychological or Mental Injuries: Not typically covered as gradual stress or standalone occupational diseases. However, psychiatric trauma may qualify if linked to a specific "accident" (e.g., sudden traumatic event), proven by medical evidence showing causation. Pure occupational stress does not constitute an "accident."

Occupational Diseases-- Incapacity from diseases in the Second Schedule is treated equivalently to an accident injury if contracted due to the nature of employment in a specified occupation within a prescribed period (e.g., 1 month to 20 years). There are about 48-52 such diseases, categorized as follows (examples from Labour Department guides):

Physical Agents: Conditions from radiation, heat, pressure, or repetition. - Radiation-related: Skin cancer, cataract, blood dyscrasia (e.g., radiography). - Repetitive strain: Carpal tunnel syndrome, tenosynovitis, "beat hand/knee/elbow" (friction in manual labor).
Biological Agents: Infections from occupational exposure. - Anthrax, leptospirosis, tuberculosis (e.g., healthcare, butchery). - Viral: SARS, avian influenza, hepatitis (e.g., medical labs, poultry handling).
Chemical Agents: Poisonings or cancers from toxins. - Lead/manganese/mercury poisoning (e.g., battery manufacturing). - Cancers: Skin/urinary tract from arsenic/tar/benzene (e.g., dyeing, petroleum).
Miscellaneous Agents: Irritant or dust-related. - Occupational asthma, byssinosis (cotton dust), nasal cancer (wood dust).

Related but under separate ordinances (with cross-references): Pneumoconiosis (silicosis from silica dust), mesothelioma (asbestos), and occupational deafness (noise-induced hearing loss in high-risk trades like construction). Employers must report incidents within 7-14 days and maintain minimum coverage (HK$100M or HK$200M per event).

Are there any exemptions for small businesses or specific industries from purchasing ECI?

In Hong Kong, the Employees’ Compensation Ordinance (Cap. 282) mandates that all employers must purchase Employee Compensation Insurance (ECI) for their employees, with no general exemptions for small businesses or specific industries. While the requirement for ECI is near-universal, there are a few specific scenarios where exemptions or alternative arrangements may apply:

Self-Employed Individuals:
- Self-employed persons or sole proprietors who do not employ others are not required to purchase ECI for themselves, as they are not considered employees under the Ordinance. However, if they hire any employees, those workers must be covered by ECI.
Certain Family Members:
- If a sole proprietor employs immediate family members (e.g., spouse, parents, or children), these family members may not be required to be covered under ECI in some cases, as they may not be deemed employees under a formal contract of service. However, this depends on the specific employment arrangement, and employers should seek legal clarification to confirm eligibility.
Outworkers:
- Outworkers (individuals who work from home or another non-employer-controlled location for piece-rate pay, e.g., freelance artisans) are generally excluded from ECI coverage, as they are not typically considered employees under a contract of service. However, if their work arrangement resembles employment (e.g., regular work under direct employer control), ECI may still be required.
Government Employees:
- Certain government employees, such as civil servants, may be covered under separate government compensation schemes rather than private ECI policies. However, private contractors or businesses working on government projects must still provide ECI for their employees.
Specific Employment Arrangements:
- In rare cases, employees covered by alternative statutory schemes (e.g., seafarers under specific maritime laws) may have different compensation arrangements. However, this does not broadly exempt employers from ECI obligations for other employees.

How does ECI interact with other insurance policies, such as group medical insurance?

Employee Compensation Insurance (ECI) in Hong Kong is designed specifically to cover work-related injuries, occupational diseases, and fatalities. The interaction between ECI and group medical insurance depends on the nature of the injury or illness, policy terms, and coordination of benefits.

Employee Compensation Insurance (ECI):
- Purpose: A mandatory, no-fault insurance that covers employer liability for work-related injuries, occupational diseases, or death, as required by law.
- Coverage: Includes medical expenses (up to statutory limits, e.g., HK$300/day for hospitalization as of 2025), lost wages (e.g., two-thirds of monthly earnings for temporary incapacity), permanent disability compensation, and death benefits.
- Scope: Limited to incidents “arising out of and in the course of employment” (e.g., workplace accidents, prescribed occupational diseases like those listed in the Ordinance’s Second Schedule).
- Legal Obligation: Employers must purchase ECI for all employees (full-time, part-time, casual, domestic helpers) with minimum coverage of HK$100 million per event (or HK$200 million for employers with over 200 employees).
- Claim Process: Handled through the insurer, with oversight from the Labour Department for disputes or assessments.
Group Medical Insurance:
- Purpose: A voluntary employee benefit providing general medical coverage for illnesses, injuries, or medical treatments, regardless of whether they are work-related.
- Coverage: Typically covers hospitalization, outpatient care, surgeries, and sometimes dental or maternity care, depending on the policy. It is not limited to work-related conditions.
- Scope: Broader than ECI, covering non-work-related health issues (e.g., flu, chronic illnesses) and potentially work-related injuries, depending on policy terms.
- Legal Obligation: Not mandatory; offered at the employer’s discretion to attract or retain talent.
- Claim Process: Managed directly by the group medical insurer, with employees submitting claims for medical expenses as per policy terms.

Below are the key points of interaction:

Work-Related Injuries or Illnesses:
- Primary Coverage by ECI: For injuries or occupational diseases arising out of and in the course of employment, ECI is the primary insurance responsible for covering costs, as it is legally mandated to address employer liability under the Employees’ Compensation Ordinance.
- Limited Role of Group Medical Insurance: If an employee seeks treatment for a work-related injury, group medical insurance typically does not cover expenses already covered by ECI, as most group policies exclude work-related claims to avoid duplication. However:
  - Supplementary Coverage: If ECI’s statutory limits (e.g., HK$300/day for hospitalization) are insufficient to cover medical costs (e.g., for private hospital treatment), group medical insurance may cover the excess, depending on the policy’s terms.
  - Non-Covered Treatments: If ECI does not cover certain treatments (e.g., alternative therapies not recognized under the Ordinance), group medical insurance might cover them if included in its policy.
- Coordination: Employers and employees should clarify with both insurers whether the group medical policy can supplement ECI. Some group policies explicitly exclude work-related claims to prevent overlap.
Non-Work-Related Injuries or Illnesses:
- No ECI Coverage: ECI does not cover non-work-related conditions (e.g., catching a cold, personal accidents outside work). In these cases, group medical insurance is the primary coverage for medical expenses, provided the condition is covered under the policy.
- Clear Distinction: There is no interaction between ECI and group medical insurance for non-work-related claims, as ECI is irrelevant in such cases.
Disputes Over Work-Relatedness:
- If there is uncertainty about whether an injury is work-related (e.g., an injury during a lunch break or commuting), the employer, employee, and insurers may need to coordinate to determine which policy applies:
  - If deemed work-related (e.g., under specific commuting conditions like employer-provided transport or during typhoon signals), ECI applies.
  - If deemed non-work-related, group medical insurance may cover the claim, subject to its terms.
- The Labour Department or legal advice may be needed to resolve disputes, as ECI claims require proof that the incident arose “out of and in the course of employment.”
Compensation Beyond Medical Costs:

ECI: Covers non-medical benefits like lost wages (e.g., two-thirds of earnings for temporary incapacity), lump-sum payments for permanent disability, or death benefits, which are not typically covered by group medical insurance.
Group Medical Insurance: Focuses solely on medical expenses and does not provide wage replacement or disability/death benefits, making ECI essential for these aspects of work-related claims.

What are the typical exclusions in an ECI policy in Hong Kong?

ECI policies typically include specific exclusions to limit the insurer’s liability for certain scenarios that fall outside the scope of the Ordinance or the policy’s terms.

In Hong Kong, Employee Compensation Insurance (ECI) policies, mandated under the Employees’ Compensation Ordinance (Cap. 282), are designed to cover employer liabilities for work-related injuries, occupational diseases, and fatalities. However, ECI policies typically include specific exclusions to limit the insurer’s liability for certain scenarios that fall outside the scope of the Ordinance or the policy’s terms. Below is a detailed overview of typical exclusions in an ECI policy in Hong Kong, based on standard insurance practices and the legal framework.

Typical Exclusions in ECI Policies

While specific exclusions may vary depending on the insurer and policy wording, the following are commonly excluded from ECI coverage:

Non-Work-Related Injuries or Illnesses: Injuries or illnesses that do not “arise out of and in the course of employment” are excluded.
Deliberate Self-Inflicted Injuries:
- Injuries caused intentionally by the employee, such as self-harm, are not covered under ECI (Section 10 of the Ordinance). This exclusion ensures that fraudulent or deliberate acts are not compensable.
Injuries Due to Serious and Wilful Misconduct:
- If an employee’s injury results from serious and wilful misconduct (e.g., deliberately ignoring safety protocols or engaging in reckless behavior), the claim may be excluded, unless the injury results in death or serious permanent incapacity (Section 10).
Injuries Due to Intoxication:
- Injuries caused by an employee being under the influence of alcohol or non-prescribed drugs are typically excluded, as these are considered to compromise the work-related nature of the incident. However, if the injury leads to death or serious permanent incapacity, this exclusion may not apply (Section 10).
Pre-Existing Medical Conditions:
- Pre-existing medical conditions or injuries aggravated by work but not directly caused by a workplace accident or occupational disease may be excluded, unless the aggravation is clearly linked to employment duties. Insurers may require medical evidence to distinguish pre-existing conditions from work-related injuries.
Unauthorized or Unreported Employees:
- Employees not declared to the insurer may be excluded from coverage. Employers must accurately report employee numbers, job roles, and payroll to ensure all workers are covered.
Incidents Outside Policy Coverage Period:
- Injuries or diseases occurring before the policy’s start date or after its expiration are not covered. Employers must ensure continuous ECI coverage to avoid gaps, as lapsed policies lead to non-compliance with the Ordinance.
Non-Covered Occupational Diseases:
- Diseases not listed in the Second Schedule of the Employees’ Compensation Ordinance (e.g., occupational asthma, silicosis, or specific cancers caused by workplace exposure) are excluded unless they result from a specific workplace accident. For example, a non-scheduled illness like general stress or mental health conditions unrelated to a sudden “accident” is typically not covered.
Injuries During Unauthorized Activities:
- Injuries sustained while an employee is performing tasks outside their job scope or in violation of workplace policies (e.g., using equipment without authorization) may be excluded, unless deemed incidental to employment.
Fraudulent Claims:
- Claims found to be fraudulent or misrepresented (e.g., falsified medical reports or exaggerated injuries) are excluded. Insurers may investigate claims to ensure legitimacy.
Certain High-Risk Activities (Unless Specifically Covered):
- Some policies exclude high-risk activities (e.g., working at extreme heights, handling hazardous materials, or diving) unless the employer explicitly declares these activities and pays additional premiums to cover them. Employers must disclose the nature of work when purchasing ECI to avoid such exclusions.
War, Terrorism, or Civil Commotion:
- Injuries resulting from acts of war, terrorism, riots, or civil commotion are often excluded, as these are considered extraordinary events outside typical workplace risks. Some policies may offer optional coverage for such risks at an additional cost.
Nuclear or Radioactive Incidents:
Fines, Penalties, or Legal Costs: ECI policies do not cover fines or penalties imposed on the employer for non-compliance with the Ordinance (e.g., failing to maintain ECI) or legal costs arising from disputes unrelated to the claim itself.
Non-Statutory Compensation: Any compensation beyond the statutory requirements of the Ordinance (e.g., additional benefits or goodwill payments not mandated by law) may be excluded unless the policy explicitly includes such coverage.

For more details, feel free to contact EverBright!

Are there government subsidies or programs help small businesses afford ECI in Hong Kong?

ECI remains a mandatory expense under the Employees’ Compensation Ordinance (Cap. 282), with premiums calculated based on factors like payroll, industry risk, and employee numbers. However, the government supports small businesses indirectly through facilitative programs that ensure access to affordable ECI coverage, particularly for high-risk or underserved employers.

1. Employees’ Compensation Insurance Residual Scheme (ECIRS)

Description: This is the primary government-encouraged program to assist employers, including small and medium-sized enterprises (SMEs), who face difficulties obtaining ECI in the open market. Established in 2007 by the Hong Kong Federation of Insurers (with government support), it acts as a "market of last resort" to ensure compliance with the Ordinance without forcing employers into unaffordable or unavailable policies.
Eligibility for Small Businesses:
- Rejected by at least three insurers (not due to unpaid premiums or safety violations).
- Quoted premiums 30% or more above the benchmark rate for your industry.
- Applies to high-risk industries (e.g., construction, cleaning, catering) or even lower-risk SMEs if market access is an issue.
How It Helps Affordability:
- No rejections for eligible applicants; from 2018 to February 2025, the Employees’ Compensation Insurance Residual Scheme Bureau (ECIRSB) approved all applications received.
- Average annual premiums under ECIRS are competitive (e.g., around HK$13,426 for policies in force, though this varies by business size and risk).
Application Process:
- Submit via the ECIRSB (website: ecirsb.com) with proof of rejections or quotes.
- Coverage meets statutory minimums (HK$100 million per event for businesses with ≤200 employees).
Impact on SMEs: Many small businesses in high-risk sectors benefit, as it prevents premium gouging and ensures mandatory coverage without exemptions.

2. Employees’ Compensation Assistance Fund (ECAF) and Assistance Scheme

Description: Administered by the Employees’ Compensation Assistance Fund Board (under the Labour Department), this fund provides relief to employees (or dependents) if an employer fails to pay compensation due to insolvency, non-compliance, or insurer default. Employers pay a small levy (surcharge) on ECI premiums to fund it (e.g., 0.2-1% of payroll, depending on industry).
How It Helps Small Businesses Indirectly:
- Reduces financial risk for SMEs by covering claims in insolvency scenarios, potentially lowering overall business insurance needs.
- Not a direct premium subsidy, but it stabilizes the ECI ecosystem, making policies more attractive to insurers and keeping market rates lower.
Eligibility: Automatic for work-related claims; no SME-specific application needed.
Note: The levy is minimal and built into premiums, so it doesn't significantly increase costs for compliant small businesses.

What documentation is required when purchasing employee compensation insurance?

Under Hong Kong’s ECI (Cap. 282), employers must submit documents to insurers for accurate underwriting, compliance, and tailored cover. These inform risk, premiums, and statutory limits: at least HK$100m per event for ≤200 staff, HK$200m for >200. Typical Documentation Required for Purchasing ECI:

Business Registration Certificate (BR):
- Purpose: Verifies the legal existence and details of the business.
- Note: For sole proprietorships or partnerships, additional proof of business status may be required (e.g., partnership agreements).
Company Details and Nature of Business:
- Purpose: Helps the insurer assess the risk level of the business operations.
- Details: Information about the industry, business activities, and workplace environment (e.g., office-based, construction, catering, or domestic employment).
Employee Information:
- Purpose: Determines the number and type of employees to be covered, which directly impacts the premium.
- Note: For domestic helpers, details such as the helper’s name, contract start date, and work scope (e.g., cleaning, childcare) may be required.
Payroll Records:
- Purpose: Premiums are typically calculated as a percentage of the annual payroll (e.g., 0.5–2% for low-risk businesses, higher for high-risk industries like construction).
- Format: Recent payroll records, payslips, or a summary of wage expenses. For new businesses, an estimated payroll projection may suffice initially, with adjustments later.
Claims History (if applicable):
- Purpose: Allows the insurer to assess past workplace incidents and adjust premiums or terms accordingly.
- Note: New businesses or those with no claims history may not need to provide this, but established businesses with prior ECI policies should disclose this information to avoid misrepresentation.
Workplace Safety and Risk Management Information:
- Purpose: Helps insurers evaluate the risk level and potentially offer premium discounts for good safety practices.
- Note: This is particularly relevant for high-risk industries like construction or manufacturing, where insurers may request additional details to assess risk exposure.
Details of Subcontractors (if applicable):
- Purpose: Ensures coverage for subcontracted workers, as principal contractors may be liable for subcontractors’ employees if they lack valid ECI.
- Note: Accurate disclosure is critical to avoid exclusions for undeclared workers.
Insurance Application Form:
- Purpose: Formalizes the request for ECI coverage and consolidates all required information.
- Note: Some insurers may require a signed proposal form to confirm the information provided.
Proof of Previous Insurance (if renewing or switching insurers):
- Purpose: Ensures continuity of coverage and informs the new insurer of prior terms.
- Note: This helps avoid gaps in coverage, which could lead to non-compliance penalties.
Additional Documentation for Specific Cases:
- Domestic Employers: For individuals hiring domestic helpers, insurers may request the helper’s employment contract or Hong Kong ID/passport details.
- High-Risk Industries: For businesses in sectors like construction or catering, insurers may request site-specific details (e.g., project contracts, safety certifications).
- Employees Working Abroad: If employees travel or work outside Hong Kong, details of their travel scope and duration may be needed to ensure coverage for overseas incidents.

How is the premium for employee compensation insurance calculated in Hong Kong?

The premium is generally calculated as a percentage of the annual payroll, adjusted for risk factors specific to the employer’s operations. The following are the primary components considered:

Annual Payroll:
- The total wages, salaries, bonuses, allowances, and other remuneration paid to all employees covered under the ECI policy over a 12-month period.
- Role in Calculation: The payroll serves as the base amount for premium calculation. A higher payroll typically results in a higher premium, as it reflects a larger potential liability.
Industry and Risk Level:
- The nature of the employer’s business and the inherent risks associated with the work performed by employees.
- Role in Calculation: Industries with higher risks of workplace injuries or occupational diseases (e.g., construction, manufacturing, catering) have higher premium rates than low-risk industries (e.g., office-based clerical work).
- Premium Rate Ranges:
  - Low-Risk Industries: Clerical, retail, or professional services typically have rates of 0.5% to 2% of payroll.
  - High-Risk Industries: Construction, scaffolding, or cleaning services may have rates of 3% to 10% or higher, depending on specific activities (e.g., working at heights).
- Specific Activities: High-risk tasks (e.g., handling hazardous materials, operating heavy machinery) may require additional premium loadings or specific policy endorsements.
Number and Type of Employees:
- The total number of employees and their job roles (e.g., full-time, part-time, casual, or subcontracted workers).
- Role in Calculation: The number of employees affects the payroll size, and their roles influence the risk level. For example:
  - Manual laborers or field workers (e.g., construction workers) are considered higher risk than clerical staff.
  - Domestic helpers typically have lower-risk profiles, resulting in lower premiums for household employers.
- Note: Employers must declare all employees, including temporary or subcontracted workers, to ensure full coverage. Undeclared employees may lead to claim denials.
Claims History:
- Definition: The employer’s past record of ECI claims or workplace incidents.
- Role in Calculation: Insurers review the claims history (typically over the past 3–5 years) to assess the likelihood of future claims.
- Example: A business with multiple past claims may face a 10–20% loading, while a business with no claims may receive a 5–15% discount through schemes like the Employees’ Compensation Insurance Residual Scheme (ECIRS).
Workplace Safety Measures:
- Insurers may offer lower premiums for businesses with robust safety measures, as these reduce the likelihood of claims.
- ECIRS Discounts: Under the Employees’ Compensation Insurance Residual Scheme, businesses with good safety records can receive discounts of up to 20–30% on benchmark premium rates.
Policy Coverage and Limits:
- Role in Calculation: The statutory minimum coverage (HK$100 million per event for employers with ≤200 employees, or HK$200 million for >200 employees) sets a baseline. Employers opting for higher coverage limits or additional endorsements (e.g., for overseas work or high-risk activities) may face higher premiums.
Insurance Levy:
- The levy is typically a small percentage of the premium (e.g., 0.2–1% of payroll, depending on the insurer and industry). It is included in the quoted premium and does not significantly increase costs for small businesses.

Typical Premium Calculation Process

Submit Information: The employer provides documentation via an insurance application form or through a broker.
Risk Assessment: The insurer evaluates the industry, employee roles, claims history, and safety measures to assign a premium rate (expressed as a percentage of payroll).
Base Premium Calculation: The premium rate is applied to the annual payroll. For example:
- Payroll: HK$5,000,000
- Premium Rate: 2% (for a medium-risk industry)
- Base Premium: HK$5,000,000 × 0.02 = HK$100,000
Adjustments:
- Add loadings for high-risk activities or poor claims history (e.g., +10% = HK$110,000).
- Apply discounts for safety measures or clean claims history (e.g., -10% = HK$90,000).
- Add the Employees’ Compensation Insurance Levy (e.g., +HK$900).
Final Premium: The insurer provides a final quote, which may be adjusted at policy renewal based on actual payroll or claims experience.

Can an employee claim compensation if the injury occurred due to their own negligence?

Yes, an employee in Hong Kong can generally claim compensation under Employee Compensation Insurance (ECI) for a work-related injury, even if it occurred due to their own negligence, because the system operates on a no-fault principle under the Employees’ Compensation Ordinance (Cap. 282). Key Points on Negligence and ECI Claims:

No-Fault System: Compensation is payable for injuries or prescribed occupational diseases “arising out of and in the course of employment” (Section 5), regardless of whether the employee’s ordinary negligence (e.g., carelessness, failure to follow minor safety protocols) contributed to the incident. This ensures employees receive support without proving employer fault.
Exceptions (Serious and Willful Misconduct):
- Compensation may be denied if the injury results from serious and willful misconduct (Section 10), such as deliberate, reckless acts (e.g., operating machinery while knowingly intoxicated or ignoring critical safety rules).
- Burden of Proof: The employer or insurer must prove the misconduct was both serious (significant breach) and willful (intentional).
- Exceptions to the Exception: Even in cases of serious and willful misconduct, compensation is still payable if the injury results in:
  - Death (e.g., dependents receive death benefits).
  - Serious and permanent incapacity (e.g., total or significant partial loss of earning capacity).
  - The court may award full or partial compensation, considering factors like dependents’ needs.
Other Exclusions:
- Deliberate self-injury (Section 5(2)(b)).
- Injuries due to alcohol or non-prescribed drug influence (Section 5(2)(d)), unless resulting in death or serious permanent incapacity.
- Non-work-related injuries (e.g., personal activities unrelated to employment duties).

Practical Implications

Ordinary Negligence Covered: Common employee errors, such as failing to wear protective gear due to oversight or rushing tasks under work pressure, do not bar claims. For example, an employee who slips on a wet floor they neglected to clean while working can still claim compensation.
Disputes: If the insurer or employer denies the claim citing negligence:
- The ECD mediates (contact: 2717 1771 or hotline 1823).
- The Employees’ Compensation Assessment Board assesses incapacity if disputed.
- Escalate to the District Court within 6 months of assessment for legal resolution.
- The employer/insurer must prove serious and willful misconduct to deny the claim, which is rare for ordinary negligence.
Additional Remedies: Beyond ECI, employees may pursue common law claims for damages if the employer’s negligence contributed to the injury (e.g., unsafe workplace). These claims, handled separately, may yield higher compensation but require proving fault.

What is the process for filing a claim under employee compensation insurance?

The process for filing an Employees' Compensation (EC) claim under the Employees’ Compensation Ordinance (Cap. 282) is a structured, no-fault system managed primarily by the Labour Department (LD)'s Employees’ Compensation Division (ECD), the employer, the insurer, and (if needed) assessment boards or courts. It applies to work-related injuries or prescribed occupational diseases.

Step 1: Immediate Notification by Employee
- What to Do: Notify your employer (or supervisor) as soon as possible—orally or in writing—of the work injury or confirmed occupational disease (listed in the Ordinance's Second Schedule).
- Why: Failure may delay or jeopardize your claim.
- Timeline: Immediately, regardless of severity.
- Tip: Keep records of notification.
Step 2: Employer Reports the Incident
- To LD (Commissioner for Labour): Employer must report irrespective of liability using:
  - Fatal accident: Form 2; Within 7 days
  - Injury causing >3 days incapacity: Form 2; Within 14 days
  - Injury causing ≤3 days incapacity: Form 2B; Within 14 days
  - Occupational disease (incapacity or fatal): Form 2A; 7 days (fatal) / 14 days (incapacity)
  - Submit to ECD's Central Processing Team (Room 1007, 10/F, Cheung Sha Wan Government Offices) or district offices.
  - Penalty for non-reporting: Fine up to HK$50,000.
- To Insurer: Notify immediately (in writing or insurer's format). Employer must have valid ECI (min. HK$100M/200M per event).
- Your Role: Provide employer with injury details, sick leave certificates, and medical receipts promptly.
Step 3: Receive Medical Treatment
- What Happens: Employer pays for free treatment by registered doctors, dentists, physiotherapists, etc., until certified unnecessary.
  - Daily Limits (unchanged since 2018):
    - In-patient hospital: HK$300
    - Non-in-patient: HK$300
    - Both on same day: HK$370
- Payment: Employer reimburses within 21 days of your written request + receipts.
- Exams: Attend employer-nominated exams (within 7 days of notice); paid leave provided.
- Overseas Injuries: Same limits; submit originals (keep copies).
- Tip: Retain copies of all certificates/receipts.
Step 4: Receive Periodical Payments (Temporary Incapacity)
- Amount: 4/5 of the difference between pre-injury monthly earnings and current earnings.
- Timeline: Paid on normal payday; up to 24 months (extendable to 36 by court).
- Adjustment: After 12/24 months, based on wage index or CPI.
- Even After Resignation: Continues if certified necessary.
Step 5: Medical Clearance and Assessment
- Temporary Cases (>7 days, no permanent incapacity):
  - Attend Occupational Medicine Unit (OMU) for clearance, or use Paper Medical Clearance (PMC) if conditions met (no dispute, sick leave ended, etc.).
- Permanent Incapacity Cases:
  - LD refers to Employees’ Compensation Assessment Board (Ordinary or Special).
  - Board assesses % loss of earning capacity → Form 7/8.
  - Objection: Within 14 days to LD → Form 9/10; appeal to District Court within 6 months.
Step 6: LD Issues Certificate of Compensation Assessment
- Form 5: For undisputed cases (after clearance/assessment).
- Objection: Within 14 days → LD reviews → Form 6.
Step 7: Receive Lump Sum Payment
- Employer pays within 21 days of Form 5/6.
- Key 2025 Amounts (accidents ≥17 Apr 2025):
  - Permanent Total Incapacity: 96/72/48 months’ earnings (age-based); Min HK$584,220
  - Permanent Partial: % of total based on loss
  - Death Benefits: 84/60/36 months’ earnings; Min HK$514,510
  - Funeral/Medical Reimbursement: Max HK$98,950
  - Prostheses (Initial): Max HK$47,310
- Max Earnings Cap: HK$38,670/month.
- Delayed Payment Surcharge: HK$830 (initial) + HK$1,670 (after 3 months).
- Penalty: Fine up to HK$100,000.
Step 8: Dispute Resolution
- Agreement: Simple cases
- LD Assistance: Mediation/review
- Assessment Boards: Incapacity %
- District Court: Unresolved disputes
- Small Claims Tribunal: Minor direct payments
- Court Application: Within 24 months of accident (LD assists after 18 months; apply for Legal Aid).
- Assistance Scheme: If employer/insurer defaults, claim from Employees’ Compensation Assistance Fund.

What types of compensation can an employee receive under this insurance?

Employees are entitled to various types of compensation for work-related injuries, prescribed occupational diseases, or fatalities arising out of and in the course of employment.

Medical Expenses
- Covers costs for medical treatment required due to a work-related injury or prescribed occupational disease (listed in the Ordinance’s Second Schedule).
- Eligible Treatments: Include consultations, hospitalization, surgeries, physiotherapy, chiropractic treatment, occupational therapy, dental care, and other treatments by registered practitioners under Hong Kong law (e.g., Chinese medicine practitioners, nurses).
- Statutory Limits :
  - In-patient hospital treatment: Up to HK$300 per day.
  - Non-in-patient treatment: Up to HK$300 per day.
  - Both on the same day: Up to HK$370 per day.
- Process:
  - The employer is responsible for paying medical expenses directly or reimbursing the employee within 21 days of receiving a written request with original receipts.
  - Treatment must continue until certified as no longer necessary by a medical practitioner or the Labour Department’s Occupational Medicine Unit (OMU).
Periodical Payments for Temporary Incapacity
- Compensation for loss of earnings during temporary inability to work due to a work-related injury or occupational disease.
- Amount:
  - 4/5 (80%) of the difference between the employee’s pre-injury monthly earnings and their current earnings during the period of incapacity.
  - Example: If an employee earned HK$20,000/month before the injury and cannot work (current earnings = HK$0), they receive 4/5 × HK$20,000 = HK$16,000/month.
- Duration:
  - Payable on normal paydays for up to 24 months from the date of the accident or disease onset.
  - Extendable to 36 months with court approval if recovery is ongoing.
- Adjustments:
  - After 12 or 24 months, payments may be adjusted based on the Nominal Wage Index or Consumer Price Index (CPI) to reflect economic changes.
  - Payments continue even if the employee resigns, provided medical certification confirms ongoing incapacity.
- Eligibility: Requires a medical certificate confirming temporary incapacity for more than 3 days (for reporting purposes) and ongoing need for leave.
Permanent Total Incapacity
- Description: Compensation for complete and permanent loss of earning capacity due to a work-related injury or occupational disease.
- Amount: A lump-sum payment based on the employee’s age and monthly earnings (subject to a statutory cap of HK$38,670/month as of April 2025):
  - Under 40 years old: 96 months’ earnings (max HK$3,712,320; min HK$584,220).
  - 40 to under 56 years old: 72 months’ earnings (max HK$2,784,240; min HK$584,220).
  - 56 years or older: 48 months’ earnings (max HK$1,856,160; min HK$584,220).
- Process:
  - Assessed by the Employees’ Compensation Assessment Board (Ordinary or Special), which determines the percentage of earning capacity loss (100% for total incapacity).
  - The Labour Department issues a Certificate of Compensation Assessment (Form 5), and the employer must pay within 21 days.
Permanent Partial Incapacity
- Compensation for partial but permanent loss of earning capacity due to a work-related injury or occupational disease (e.g., loss of a limb, reduced mobility).
- Amount: A percentage of the permanent total incapacity amount, based on the assessed percentage loss of earning capacity by the Assessment Board.
  - Example: If an employee under 40 with HK$20,000/month earnings has a 50% loss of earning capacity, they receive 50% × (96 × HK$20,000) = HK$960,000.
  - Subject to the same minimum (HK$584,220) and maximum caps as permanent total incapacity.
- Process: Similar to permanent total incapacity, with the Assessment Board determining the percentage loss via Form 7/8. Payment is due within 21 days of the Form 5/6 certificate.
- Note: The percentage is based on standardized schedules (e.g., loss of a finger, hearing loss) or medical evidence for non-scheduled injuries.
Death Benefits
- Compensation payable to the dependents (e.g., spouse, children, parents) of an employee who dies due to a work-related injury or occupational disease.
- Amount: A lump-sum payment based on the deceased employee’s age and monthly earnings (cap of HK$38,670/month):
  - Under 40 years old: 84 months’ earnings (max HK$3,248,280; min HK$514,510).
  - 40 to under 56 years old: 60 months’ earnings (max HK$2,320,200; min HK$514,510).
  - 56 years or older: 36 months’ earnings (max HK$1,392,120; min HK$514,510).
- Additional Payments:
  - Funeral expenses: Up to HK$98,950 (reimbursed to the person who paid for the funeral).
  - Medical attendance expenses prior to death: Up to the same daily limits as medical expenses (HK$300/day in-patient, HK$370/day combined).
- Process:
  - The employer reports the fatal accident within 7 days using Form 2.
  - Dependents apply for compensation through the Labour Department, which issues a Certificate of Compensation Assessment (Form 5).
  - Payment is due within 21 days of the certificate.
Prostheses and Surgical Appliances
- Covers the cost of initial provision and ongoing repair/replacement of prostheses (e.g., artificial limbs) or surgical appliances (e.g., hearing aids, orthopedic devices) required due to a work-related injury or occupational disease.
- Statutory Limits (as of April 2025):
  - Initial provision: Up to HK$47,310.
  - Repair or replacement: Up to HK$143,550 (over the employee’s lifetime, subject to medical necessity).
- Process:
  - Requires certification by a medical practitioner or the Assessment Board that the appliance is necessary.
  - Employer or insurer reimburses costs upon submission of receipts and certification.
Surcharges for Delayed Payments
- Description: Additional payments imposed on the employer if compensation (e.g., lump sums or medical reimbursements) is not paid within the statutory deadline (21 days from the Certificate of Compensation Assessment).
- Amount:
  - Initial surcharge: HK$830 if payment is late.
  - Additional surcharge: HK$1,670 if payment remains unpaid 3 months after the initial surcharge.
- Purpose: Encourages timely payment to avoid financial hardship for the employee or dependents.

In summary, ECI provides comprehensive compensation for medical expenses, temporary incapacity, permanent incapacity (total or partial), death benefits, prostheses, and surcharges for delayed payments.

How are disputes over employee compensation claims resolved in Hong Kong?

The Labour Department’s Employees’ Compensation Division (ECD) plays a central role in facilitating resolution, with additional mechanisms like assessment boards and courts available for complex cases.

Disputes over ECI claims typically arise due to:

Disagreement on whether the injury or illness arose “out of and in the course of employment.”
Disputes over the degree of incapacity (temporary or permanent, partial or total).
Denial of claims by the insurer (e.g., due to policy exclusions, serious and willful misconduct, or non-work-related injuries).
Delays or non-payment of compensation by the employer or insurer.
Discrepancies in compensation amounts or medical expense reimbursements.
Employer insolvency or lack of valid ECI coverage.

The resolution process is designed to be accessible, efficient, and cost-effective, with free assistance from the Labour Department. The steps are as follows:

Initial Attempt at Agreement
- The employee, employer, and insurer attempt to resolve the dispute informally through direct communication or negotiation.
- Process:
  - The employee submits all necessary documentation (e.g., medical certificates, receipts, accident details) to the employer, who forwards them to the insurer.
  - The insurer assesses the claim against the ECI policy and the Ordinance’s requirements (e.g., work-relatedness, statutory compensation limits).
  - If a dispute arises (e.g., insurer denies the claim or offers insufficient compensation), the parties discuss to reach a mutual agreement.
- Role of Employer: The employer must cooperate by providing accurate employee and payroll records and reporting the incident to the Labour Department (e.g., via Form 2 within 7 days for fatal accidents or 14 days for injuries causing >3 days incapacity).
- Outcome: If resolved, the employer or insurer pays the agreed compensation (e.g., medical expenses, periodical payments) within 21 days of agreement or a Labour Department certificate.
Labour Department Mediation and Assistance
- If no agreement is reached, the Employees’ Compensation Division (ECD) of the Labour Department provides free mediation and guidance to resolve disputes.
- Process:
  - Contact ECD: The employee or employer contacts the ECD or visits a district office.
  - Submit Documentation: The employee provides medical certificates, receipts, and proof of employment, while the employer submits incident reports (e.g., Form 2, 2A, or 2B) and insurance details.
  - ECD Review: The ECD reviews the case to ensure compliance with the Ordinance, clarifies eligibility, and facilitates discussions between the employee, employer, and insurer.
  - Certificate of Compensation Assessment (Form 5): For undisputed or resolved cases, the ECD issues a Form 5 specifying the compensation amount (e.g., for medical expenses, permanent incapacity, or death benefits). If disputed, the process moves to further steps.
- Objection to Form 5: Either party can object within 14 days by submitting a written request to the ECD, leading to a review and possible issuance of a revised Certificate of Review (Form 6).
- Timeline: Employees must file claims within 24 months of the accident or disease onset, with ECD assistance available after 18 months to meet this deadline.
Assessment by Employees’ Compensation Assessment Board
- For disputes involving the degree of incapacity, the case is referred to an Employees’ Compensation Assessment Board (Ordinary or Special).
- Process:
  - Referral: The ECD refers cases requiring medical or incapacity assessments, typically for permanent total or partial incapacity.
  - Board Composition: Includes medical professionals, employer/employee representatives, and Labour Department officials.
  - Assessment:
    - The board evaluates medical evidence, employee condition, and work-relatedness.
    - Issues a Certificate of Assessment (Form 7 for Ordinary, Form 8 for Special) specifying the percentage loss of earning capacity.
  - Objection: Either party can object within 14 days by submitting Form 9 (Ordinary) or Form 10 (Special) to the ECD, requesting a reassessment.
  - Compensation Calculation: Based on the assessed percentage and employee’s age/earnings.
- Outcome: The board’s assessment informs the final compensation amount, which the employer or insurer must pay within 21 days of the certificate.
District Court Proceedings
- If mediation or assessment fails to resolve the dispute, either party (employee or employer) can escalate the case to the District Court for a legal determination.
- Process:
  - Filing an Appeal: File within 6 months of the Assessment Board’s decision or ECD’s certificate (Form 5/6) with the District Court.
  - Legal Representation: Employees may apply for Legal Aid through the Legal Aid Department if financially eligible, as court proceedings may involve legal costs.
  - Court Review: The court examines evidence, including medical reports, employment records, and insurer’s position, to determine:
    - Whether the injury/disease is work-related.
    - The appropriate compensation amount (e.g., medical expenses, periodical payments, lump sums).
    - Any liability for serious and willful misconduct (rarely applied unless proven).
  - Outcome: The court issues a binding order for compensation, which the employer or insurer must pay, potentially with surcharges for delays (HK$830 initial, HK$1,670 after 3 months).
- Note: The District Court is the primary judicial body for ECI disputes, though complex cases may escalate to higher courts (e.g., Court of Appeal) in rare instances.
Small Claims Tribunal (for Minor Reimbursements)
- For minor, straightforward disputes over direct payments, the Small Claims Tribunal offers a quick, low-cost resolution.
- Process:
  - The employee files a claim with the tribunal, providing receipts and evidence of non-payment.
  - No legal representation is required, making it accessible for employees.
  - The tribunal issues a ruling, which the employer must comply with.
- Use Case: Suitable for disputes over small medical reimbursements (e.g., within the HK$300/day limit) when the employer delays or refuses payment.
Employees’ Compensation Assistance Scheme (ECAS)
- If the employer lacks valid ECI or is insolvent, or if the insurer denies a valid claim, the employee can apply to the Employees’ Compensation Assistance Fund for relief.
- Process:
  - Contact the Employees’ Compensation Assistance Fund Board (administered by the Labour Department).
  - Submit evidence of the work-related injury/disease and proof of employer/insurer default (e.g., insolvency documents, claim denial letter).
  - The Fund covers statutory compensation (e.g., medical expenses, lump sums for incapacity or death) and may pursue recovery from the employer.
- Eligibility: Available for claims where the employer fails to meet obligations under the Ordinance, ensuring employees are not left uncompensated.
- Note: The Fund is supported by a small levy on ECI premiums (e.g., 0.2–1% of payroll), but this does not directly resolve disputes—it acts as a safety net.
Insurance Authority (for Insurer Misconduct)
- If the dispute involves the insurer’s improper handling of the claim (e.g., unjustified denial due to policy misinterpretation), the employee or employer can file a complaint with the Insurance Authority (IA).
- Process:
  - Submit a complaint to the IA with details of the denial and supporting documents.
  - The IA investigates potential misconduct but does not directly resolve compensation disputes.
  - Outcome may lead to insurer reconsideration or regulatory action.
- Use Case: Rare, used when the insurer’s actions violate regulatory standards.

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