Hong Kong Ordinances

EMPLOYEES' COMPENSATION ORDINANCE - SECT 40

Compulsory insurance against employer's liability

(Past version on 30/06/1997).

(1) Subject to subsections (1B) and (1C), no employer shall employ any
employee in any employment unless there is in force in relation to such
employee a policy of insurance issued by an insurer for an amount not less
than the applicable amount specified in the Fourth Schedule in respect of the
liability of the employer. (Amended 47 of 1995 s. 4)

(1A) Subsection (1) does not require an employer to obtain insurance for any
liability he may have in respect of damages awarded by a court outside Hong
Kong to an employee referred to in section 30B. (Added 59 of 1988 s. 12)

(1B) A principal contractor who has undertaken to perform any construction 
work may, in compliance with subsection (1), take out a policy of insurance
issued by an insurer for an amount not less than the amount specified in the
Fourth Schedule in relation to a principal contractor in respect of the
liability of the principal contractor and the liability of his sub-contractor.
(Added 47 of 1995 s. 4)

(1C) A group of companies may, in compliance with subsection (1), take out a
policy of insurance issued by an insurer for an amount not less than the
amount specified in the Fourth Schedule in relation to a group of  companies
in respect of the liabilities of the companies, bodies corporate and
corporations in the group specified in the policy. (Added 47 of 1995 s. 4)

(1D) For the purpose of this section, section 44B and the definition of

"the available amount covered by the policy of insurance"
(可得的保險單承保款額) in
section 38, "accident" (意外) means an accident or a series of accidents
arising out of one event, and in relation to an occupational disease-

   (a)  where incapacities or deaths of more than one employee are
        attributable to a cause that does not arise out of a sudden and
        identifiable event, the incapacities or deaths of such employees are
        regarded as being caused by separate accidents arising out of separate
        events; and

   (b)  where incapacities or deaths of more than one employee are
        attributable to a cause that arises out of a sudden and identifiable
        event, the incapacities or deaths of such employees are regarded as
        being caused by an accident or a series of accidents arising out of
        one event. (Added 47 of 1995 s. 4)

(1E) For the avoidance of doubt, it is declared that-

   (a)  the amount required by subsection (1) is ascertained by reference to
        the number of employees in relation to whom the policy is in force and
        in accordance with the Fourth Schedule;

   (b)  the amount that may be taken out under subsection (1B) or (1C) is
        irrespective of the number of employees in relation to whom the policy
        is in force and in the case of subsection (1B), is also irrespective
        of the number of sites on which construction work undertaken by a
        principal  contractor is performed;

   (c)  the amount required by subsection (1), (1B) or (1C) may be inclusive
        of interest, costs and expenses indemnified under the policy and other
        costs and expenses incurred by the employer (including a principal 
        contractor, a sub-contractor, a holding company or a subsidiary) and
        recoverable from the insurer under the policy;

   (d)  where a principal contractor has taken out a policy of insurance under
        subsection (1B), the principal contractor and a sub-contractor insured
        under the policy shall be regarded as having complied with subsection
        (1);

   (e)  where a group of companies has taken out a policy of insurance under
        subsection (1C), all the companies, bodies corporate and corporations
        in the group insured under the policy shall be regarded as having
        complied with subsection (1). (Added 47 of 1995 s. 4)

(1F) The reference in this section to the liability of a person is a reference
to the liability of the person under this Ordinance and independently of this
Ordinance for any injury to his employee by accident arising out of and in the
course of the employee's employment. (Added 47 of 1995 s. 4)

(2) An employer who contravenes subsection (1) commits an offence and is
liable-

   (a)  on conviction upon indictment to a fine at level 6 and to imprisonment
        for 2 years; and

   (b)  on summary conviction to a fine at level 6 and to imprisonment for 1
        year. (Amended 52 of 2000 s. 19)

"the available amount covered by the policy of insurance"
(可得的保險單承保款額)

"accident" (意外)