It is very important that all employers declare actual earnings information for all their employees to their insurers to ensure that they have full indemnity insurance protection to meet the potential liability of their employees in the case of accidents arising out of, and in the course of, their employment.

Employers are reminded that according to the average clause contained in the employees’ compensation insurance policy regarding the Policy Limit of Indemnity (which is widely adopted in the market), under-reporting of earnings may result in a proportionate reduction in the insurer’s indemnity for compensable claims. In such cases, employers will have to bear the proportionate share of indemnity for injured employees themselves. If no declaration of actual earnings by the employer is received by the insurer as prescribed in the policy, for the purpose of this clause the earnings estimated by the employer as at the commencement of the Period of Insurance shall be used in lieu of the actual earnings that should have been declared to determine the extent of the under-insurance, if any.

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