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Can I obtain EC Insurance if my company operates out of my home?


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Q:

Hi, I've learned that insurance company refuse to quo for an employment contract that the nature of contract is "home working base". - Is it right? - is contract term not allowed? Or "home working base" contract is no need to cover by EC insurance?

A:

Many Hong Kong Insurance Companies will decline to quote Employee’s Compensation coverage for businesses operating out of a personal residence.

This does not mean that there is no need for EC insurance coverage; on the contrary, Employee’s Compensation insurance is the only mandatory form of business insurance protection in Hong Kong. Any business or employer who is compensating employees must have EC insurance coverage in place to satisfy Labour Department regulations (and avoid costly fines).

However, for business where the company is operating out of someone’s home it can be extremely difficult to obtain any EC protection. The reason for this is due to the fact that, should a claim situation occur, it would be very difficult to determine whether an accident was due to a workplace or employment cause.

For example, a warehouse worker working out of a logistic company’s warehouse trips and falls on the corner of a shelf, breaking his leg. In this case, his injury is clearly deemed to have been work related and an EC insurance policy would provide the required compensation to him.

A stay-at-home company would have a harder time defining whether an accident occurred on the job, or outside or work. Any accident inside the home could be considered to be EC related, and consequently present a much greater risk to the insurer. As such, all of the Hong Kong insurance companies which CCW Global works with will refuse to provide a quotation for businesses where the primary business operations occur at a residential address.

However, if you have a legitimate business you need EC insurance protection – after all, it is a government regulation. Thankfully, there is a final option in Hong Kong called the Employees’ Compensation Insurance Residual Scheme Bureau - http://www.ecirsb.com.hk/en/index.html.

Accessing coverage through the ECIRSB you must be able to prove that you have been declined a quote or cover from a minimum of 3 different Hong Kong insurance companies. Alternatively, you must be able to prove that you have been quoted premiums in excess of 30% the standard market rate for Employee Compensation insurance.

While going through the ECIRSB will entail far more headache than simply purchasing a policy through a private insurance company, this is realistically your only option if you wish to continue working out of your home. While real-estate in Hong Kong is amongst the most expensive in the world, there are a number of co-working solutions across the city where you could operate out of. Using one of those addresses will satisfy the requirements of an insurer to issue an Employee’s Compensation insurance quote and may prove to be simpler than the hassle of going to the ECIRSB.

Should you have any additional questions about business insurance products or EC Insurance coverage in Hong Kong, or if you would like to discuss your insurance needs further, please Contact Us Today and speak with an expert broker now.

 

Answered on: 13 August, 2018 14:03


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