What happens if I don't have Employees' Compensation Insurance?

It's a criminal offence, with a maximum fine of HK$100,000 and two years' imprisonment. On top of that, if a staff member is injured, the employer bears the full compensation liability directly — which in serious cases can run into millions.

What is the minimum coverage amount required?

By law: companies with 200 or fewer employees must insure at least HK$100 million per event; companies with more than 200 employees must insure at least HK$200 million. This is the statutory floor — standard market policies generally already meet it.

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Employees' Compensation — the moment you hire, it's required.

This isn't a "worth buying" question — it's a legal requirement. The Employees' Compensation Ordinance (Cap. 282) requires employers to insure all employees against work injury, including part-timers and casual staff. This guide walks you through: what's covered, what it costs, and where people commonly trip up.

What does the law actually require?

Item	Employees' Compensation Ordinance requirement
Who must buy it	All employers — regardless of company size, industry, or whether staff are full-time or part-time
Who's covered	All employees: full-time, part-time, long-term, casual, and those on probation
Minimum coverage	≤ 200 employees: at least HK$100 million per event > 200 employees: at least HK$200 million per event
Consequence of not buying	Criminal offence — maximum fine HK$100,000 + 2 years' imprisonment
What the policy covers	Statutory compensation for work injury or death, plus the employer's civil liability under common law

"The person I hired is a freelancer, so I don't need this" — think again

Courts look at the actual employment relationship, not the contract's title. If someone works fixed hours, uses your equipment, and takes instructions from you, they can be ruled an employee even if the contract says "self-employed." When in doubt, insure — Employees' Compensation is one of the cheaper lines of business insurance.

What's covered, and what isn't?

✓ Generally covered

Statutory compensation for injury sustained during work (medical expenses, periodical payments, permanent disability compensation)
Statutory compensation for death caused by work
The employer's civil liability to employees under common law
Scheduled occupational diseases (as listed in the Ordinance)

✗ Generally not covered

Injuries not arising "out of and in the course of" work (e.g. private activity after hours)
An employee's own serious and wilful misconduct (subject to case specifics and policy terms)
Contractors' workers — unless specifically extended in the policy (subcontracted work needs particular attention)
Third-party (customer, passer-by) claims — that falls under Public Liability Insurance

How is the premium calculated?

Two main factors drive the premium: industry risk and total annual payroll. Insurers apply a rate per HK$100 of wages.

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Low risk: office roles

Accounting firms, IT companies, consultancies — low injury risk, the cheapest rate band in the market.

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Medium risk: F&B and retail

Kitchen work, moving stock — higher risk than office roles, mid-range rates. Remember to include part-time floor staff when declaring.

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High risk: construction and renovation

Site work and working at height carry the highest risk — rates can run many times an office role's, and not every insurer is willing to underwrite it. This is where working with a broker matters most.

The proper way to save on premiums

Declare job categories accurately (report office and field staff separately, don't classify everyone as field staff), review your actual payroll before renewal, and keep a clean claims record. Don't do this: under-report headcount or understate payroll — insurers can't verify it at claim time, and you risk being under-compensated with the employer left to cover the shortfall.

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Employees' Compensation FAQ

Do part-timers and casual workers need to be covered?

Yes. The Ordinance's definition of "employee" covers full-time, part-time, long-term, and casual staff, including those on probation. Any employment relationship triggers the duty to insure.

I run the company alone — do I need this?

If the company has no employees (the proprietor doesn't count as one), you can skip it. But the moment you hire anyone — even a single part-timer — the legal obligation kicks in immediately. If you draw a salary as an employee of your own limited company, it's worth having a licensed professional confirm whether you count as an employee.

Is a staff member injured during their lunch break covered?

It depends — whether it happened "in the course of work" is the key test. Generally, private activity during a normal lunch break may fall outside the scope of work, but if the employee was out on an errand for the company, it's very likely covered. These grey areas are exactly why good record-keeping matters.

With Employees' Compensation Insurance in place, do I still have anything to do if a staff member is injured?

No, you're not off the hook. Employers have statutory procedural duties — work injuries generally must be reported to the Labour Department within a specified time limit (the form and deadline depend on the severity of the injury). Late or missed reporting can itself be prosecuted. The insurance pays the claim; the procedural responsibility stays with the employer.

Not sure if your current cover is enough?

We'll check your existing policy for free — many companies discover misclassified job categories or under-reported headcount only when we look.

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