According to the Employees’ Compensation Ordinance, an employer is liable to pay compensation in respect of injuries sustained by his employees as a result of an accident arising out of and in the course of employment. An employer must be in possession of a valid insurance policy to cover his liabilities both under the Employees’ Compensation Ordinance and common law for work injuries for all employees. 

If the employer does not take out insurance cover for all his business operations and/or for all employees’ occupation categories, can they still enjoy corresponding cover? 

Mr. Ng is running a transportation business. His company is also engaged in frozen meat trading. One of Mr. Ng’s employees was injured when he was working as a “machine operator” undertaking meat cutting work. 

The injured employee claimed employees’ compensation from his employer. Mr. Ng then lodged the claim under the employees’ compensation insurance policy. However, the insurer declined to indemnify Mr. Ng’s company. Why did the insurer reject this claim? 

The insurance company rejected Mr. Ng’s claim on the grounds that Mr. Ng only declared the “Business/Trade” of his company as "Transportation”, and did not declare the employee’s occupation category of “machine operator” when taking out employees' compensation insurance cover. The meat cutting work being engaged in by the injured employee at the time of accident was for Mr. Ng’s food trading business, which is irrelevant to the insured business of “Transportation” as specified in the policy schedule. 

In addition, “machine operator” did not fall within any of the categories of employees insured under Mr. Ng’s policy. The insurance company was of the opinion that the injured employee was not covered by the policy. However, being the employer, Mr. Ng’s company is still liable to compensate the injured employee according to the Employees’ Compensation Ordinance. 

There is always a risk that employees may be accidentally injured while at work. Employees’ compensation insurance provides cover against accidents to employees during the course of their employment, protecting the employer’s business from the financial burden generated from the compensation and ensuring the company complies with all legal requirements. To enjoy this protection, employers are advised to declare all material facts including, all usual trade and business, number of employees, job nature and occupation categories of employees, total earnings, etc., allowing the insurance company to assess the risk exposure and premium level. This will also prevent disputes and arguments when accidents occur. 

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