Employees are one of the most essential factors in any business. They assist the business run and turn the CEO’s vision into reality. Therefore, companies need to ensure that their employees know they are appreciated with rewards, compliments, celebrations and insurance.
Employee compensation insurance is a compulsory factor that helps business insure their employees while at work. As an Employer, you got a liability if one of your staff suffers an injury or contracts illness during their duties to the company. Employee’s safety is the employer’s liability: when they are on their way to work, meeting a client outside or even a company event.
The insurance will help the employer cover salaries during recovery, medical costs, and permanent disability/death compensation. It is a crucial insurance; hence it is mandatory in Hong Kong. This case study will explain how a high-quality employee compensation covered the costs of an employee injured at a company event.
Client Background
The client is a finance firm that focuses on accounting and financial advice. They are based in Hong Kong and provide services to a large client base. The business has around 20 employees working for the new company. Their duties involve providing services to clients, attending meetings in the office and meeting clients outside the office.
Many believe the finance industry could not possibly deal with work injuries- as the staff is mainly indoors. In fact, this is very wrong, as employees can be injured at any point in their employment. For example, an injury could occur in the office or when an employee meets clients for deals. The employer is liable for their safety (with exceptions)-at any point from them starting their journey to work, till they reach home.
Client Problem-The Need for Employee Compensation Insurance
It is common for employers to celebrate with their employees with a company party after reaching quarterly targets. It is an excellent way for all level staff to get together and feel rewarded for their efforts. Although even when the employees are not working, the business is liable for anything that happens at this celebration.
The financial firm had just met their 4th quarter targets near Christmas; therefore, the CEO decided to throw a Christmas party at the office to celebrate the holiday and success of the company. It seemed like a wonderful occasion, and all was going well until one of the employees slipped on decoration and fell on his arm. He was in great pain and had to be rushed to the hospital.
At the hospital, the doctors informed the manager that he had suffered a severe broken bone on his right arm and would take around two months (60 days) to heal. At this point, the business must pay for the medical expenses. Additionally, the company will also need to pay 80 % of 2 months’ salary as he recovers and any compensation.
Additionally, after two months, experts did more tests on the employee, and the doctor noticed that the injury limited his little finger movement, and he was suffering from ankylosis (all three joints). Under the employee compensation ordnance– ankylosis of little finger is 4% disability. Therefore, the business will have to provide compensation for this disability.
How Employee Compensation Insurance was the Solution?
After a work injury, the employers need to inform the labour department and insurance company. It is mandatory in Hong Kong for an employer to pay for all expenses linked to the injury. This includes the medical bills, salary during recovery leave and any possible compensation costs. Fortunately, the finance firm had purchased high-quality employee compensation insurance through Red Asia Insurance.
Therefore, employee compensation insurance was the perfect protection in this situation. As the insurance covered all medical costs, salary injured employee (60 Days). As the injury resulted in 4 % disability, compensation costs were paid too. The insurance will provide the cost of compensation no matter how serious the injury.
In summary, employee compensation insurance saved the business a sizeable financial expense. But, more importantly, the insurance provided the employee with peace of mind-financially and emotionally.
The employee compensation insurance reimbursed the following costs: ( only after the employee was fully recovered and examined post-injury)
- Medical Expenses: HKD 1000
- 80 % salary for 60 days: HKD 96,000 -( HKD 60,000 salary per month-including average commission)
- Compensation Cost of 4%: HKD 68,352 ( Under compensation law-the, compensation calculation can only include the max salary of HKD 35,600 )
Total costs: HKD 165,352
Conclusion
Employee compensation insurance covers the employer’s liability if any of their employees gets injured, contracts a disease, or dies during and because of his work. The insurance helps the business take care of their employees and at the same time help the company too. The compensation insurance provides a financial safety net when things go wrong.
Furthermore, things do not always go the way planned, and insurance helps support the business during these challenging situations with the correct advice. It is crucial to purchase an employee compensation insurance plan that can cover all risks.
In summary, no matter if your business works in the office, construction site or freelance – injuries can happen in any industry.
To learn more about Employee Compensation Insurance and protect your employees, contact Red Asia Insurance.
