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Lesson 8

Lesson 8. Common types of insurance protection for business II. Introductory case: court case on industrial accident.

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Lesson 8

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  1. Lesson 8 Common types of insurance protection for business II

  2. Introductory case: court case on industrial accident • A Mainland Chinese visited Hong Kong with a two-way permit which means that employment in Hong Kong is not allowed. However he got employed and worked in a construction site. Unfortunately he was injured during his work. It was then a problem whether the employer should be held liable to somebody’s injury when the employee working status is in doubt • In fact the Employment compensation ordinance has a provision allowing the court to make discretion, with consideration of related circumstances to treat the illegal contract as if it is a valid contract of service • Finally, the court ruled that compensation should be paid to him

  3. Introductory case Questions to think about: • What implications do the case has to employers? • Can you find any examples of such kind of illegal employments in our daily life in Hong Kong • What risk do you think that the employers of these kind of illegal workers would run?

  4. Topics to be covered

  5. Liability Insurance • It covers the loss of or damage to other peoples’ assets caused by the insured ( the company or its employees) as well as other person’s (including those employed by the insured) injury or even death due to the negligence of the insured.

  6. Common types of liability for business

  7. Common types of liability insurance for business

  8. Employees’ compensation Insurance Employer’s Liability to employees’ compensation in case of: • Injury by Accident: • If an employee sustains an injury or dies as a result of an accident arising out of and in the course of his employment, his employer is in general liable to pay compensation even if the employee might have committed acts of faults or negligence when the accident occurred. • Occupational Disease • An employee suffering incapacity arising from an occupational disease is entitled to receive the same compensation as that payable to an employee injured in an accident arising out of and in the course of employment, if the disease is one due to the nature of any occupation in which he was employed at any time within the prescribed period immediately preceding the incapacity caused. (Source: A Concise Guide to the Employees’ Compensation Ordinance, March 2015, Hong Kong, p. 4-5)

  9. Employees’ compensation insurance A compulsory insurance • As required by law, no employer shall employ any employee in any employment unless there is in force a policy of insurance to cover their liabilities both under the Employees’ Compensation Ordinance and at common law for injuries at work in respect of all their employees, irrespective of the length of employment contract or working hours, full-time or part-time employment. Should there be any queries on legal liability, employers should seek professional legal advice. (Source: A Concise Guide to the Employees’ Compensation Ordinance, March 2015, Hong Kong, p. 22)

  10. Employees’ compensation insurance Two types of coverage:

  11. Case for discussion: Increasing industrial accidents in Hong Kong According to the news published in 2016, a study revealed that the industrial safety in Hong Kong is a severe issue. The local death rate is 5.2 per 10,000 workers which is three times that of in Australia and more than two folds that of in Singapore. The costs associated with employees’ compensation has been increasing rapidly in recent year. In a research report, it was found that the claims shot up at a rate of 20% to 30% per year owing to ever-rising number and seriousness of employee injuries. In view of such trend some major insurers have in fact planned to withdraw from this market. The result is inevitable increase of premiums and it is expected that such cost will keep rising in coming years unless some measures can be taken promptly.

  12. Case for discussion: Increasing industrial accidents in Hong Kong Question: • what are the implications for business? • Any suggestions to reduce such costs?

  13. Can the liability on employees’ compensation be transferred? • Is it possible to make agreement/contract with employees such that all the costs involved to the injured employee when industrial accident happens would be borne by the concerned employee himself or herself? • It is not allowable since employer’s liability to employees’ compensation when industrial accident occurs has been specified by statue law and that will override agreements or contracts entered to the contrary

  14. Public liability insurance • It provides coverage to the insured company when injury of other people and/or damage to other people’s property occurs during the process of the company’s operations • Also the insured company or its employees are held responsible • e.g. a customer knocked down in a restaurant due to the carelessness of the waiter

  15. Revisit the topics covered

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