This case study will explain a work injury case and how employee compensation insurance has helped one of our client (employer). Employee compensation insurance is mandatory for every employer in Hong Kong. The insurance helps companies protect their employees by providing coverage for injuries and occupational illnesses that may occur during their working period. Therefore  Red Asia insurance provides high-quality employee compensation insurance to cover a wide range of risks.

Background of Client

 Our client is a restaurant owner and has many employees in his business that he is responsible for. There are many possible employee injuries and risks that could occur in a restaurant. Especially in the kitchen, where many factors could harm the employee, such as fires, knives, and more. It is an employer’s duty to make sure that their employees are safe and taken care of in case of an injury.

Client Problem/Situation

Employee-compensation-InjuryThe client in this situation was liable for an injury that happened to one of his chefs. The chef had cut his hand as he was chopping. The cut was deep (between the thumb and index finger), and the chef had to be rushed to the hospital for treatment. Luckily, the chef did not lose any fingers and was advised not to use the hand for a while. Therefore, he took around 120 days to recover from the injury and return to work.

Our client (employer) had reported the injury right away to the labour department. As it is the law to report employee injuries with 14 days and death within 7 days. The labour department informed the client that according to the employee compensation ordinance, it is his duty:

  • Pay medical bills
  • Provide 80% of average monthly salary while recovering (medical leave related to injury)
  • Provide compensation depending on medical recovery report

Additionally, A month after the chef had recovered and returned to work, the labour department contacted him to do a final assessment medical check-up. The report showed that the chef had developed a permanent partial disability of 2%. As he is below 40 years old, the labour department calculates the compensation costs according to the disability percentage multiplied by 96 months of average salary, which the employer pays.

How Employee Compensation Insurance was a Solution?

The client is liable for his employees. According to the employee compensation ordinance, it is his duty to pay any financial loss caused to the employee due to the injury.

The client, with respect to the law and his employee, eventually paid:

  • 600 HKD for medical costs- 300 HKD per day in the hospital
  • 112,000 HKD – 80% of salary while on leave (Average monthly salary: 35,000 HKD)
  • 67,200 HKD -Compensation for 2% permeant partial disability

Total costs of around: 180,000 HKD

Fortunately, the employer has purchased high-quality employee compensation insurance through Red Asia Insurance. In addition, employee compensation insurance covered all the payments the client had made regarding the employee injury. Thus, the insurance helps employers reduce their financial loss and focus on helping the employee recover from the injury.

Although it is essential to note that the insurance company will only pay the insurance after the employee has recovered and completed all medical reports. As it allows the insurance company to calculate the most accurate cover for the client.


Employee compensation insurance is the perfect protection for such cases, as the insurance covers all medical costs, salary while recovering and compensation to the injured employee.

Therefore, employee compensation insurance has saved the client a large sum of financial loss and, more importantly, allowed the employer to provide the employee with the financial care they needed during recovery.

To learn more about Employee Compensation Insurance and protect your employees, contact Red Asia Insurance.