Employees' Compensation Insurance in Hong Kong: Frequently Asked Questions

This page answers the questions Hong Kong employers ask most often about Employees' Compensation insurance, in one quick-reference place, with a link to the fuller guide on each topic for anyone who needs more depth than a short answer provides. It is built for the moment a specific question comes up in the middle of setting up payroll or onboarding a new hire, when a fast, accurate answer matters more than reading a full guide end to end.

The basics

Is Employees' Compensation insurance mandatory?

Yes, for every employer in Hong Kong, regardless of size, with no exceptions for small businesses, part-time staff, or short-term contracts. The obligation begins from the moment a business hires its first employee, not once it reaches some minimum size.

What is the minimum cover required?

HK$100 million per event for employers with up to 200 employees, and HK$200 million per event for employers with more than 200 employees, under the Employees' Compensation Ordinance.

What happens if I do not have EC insurance?

It is a criminal offence, carrying a fine of up to HK$100,000 and up to two years' imprisonment, and the employer bears the full cost of any claim personally, on top of the criminal penalty itself.

Do I need EC insurance for a domestic helper?

Yes. A household employing a foreign domestic helper is an employer under the Ordinance and carries the same duty as any business. See our domestic helper guide.

What if I only have one employee?

The obligation applies identically regardless of headcount. A company with a single employee needs EC insurance just as much as one with a thousand.

Cost

How is the premium calculated?

As a rate applied to your annual payroll, set by the risk class of the work your employees do, so it reflects both how much you pay staff and how hazardous their duties are. See our cost guide.

Why does construction cost more to insure than an office?

Because the risk of a serious work injury is far higher on a construction site, reflected in a higher risk class and a correspondingly higher rate. See our guide to EC insurance by industry.

Can I reduce my EC premium?

Declare payroll and duties accurately so you are rated on the correct class, manage workplace safety to keep your claims record clean, and review the market at renewal rather than accepting the first quote offered.

Is EC insurance based on headcount or payroll?

Mainly payroll, adjusted for risk class. Two businesses with identical payroll in different trades will pay noticeably different premiums.

Claims and compliance

How quickly must a work injury be reported?

Generally within 14 days of the accident, or 7 days if the case is fatal, reported to the Commissioner for Labour. This is separate from notifying your insurer, and both steps matter. See our full guide to EC claims and penalties.

What does EC insurance actually pay for?

Periodical payments during incapacity, medical expenses connected to the injury, a lump sum for permanent incapacity, and compensation to family in the event of death, all subject to the limits set out in the Ordinance.

Does EC cover employees working overseas?

Generally yes, if the employment relationship remains based in Hong Kong, but this is worth confirming for the specific arrangement rather than assumed automatically.

What is the difference between statutory and common law liability under EC?

Statutory liability is fixed, no-fault compensation under the Ordinance. Common law liability is a separate claim for negligence, where damages can be far larger. A standard policy covers both.

Do I need to keep records beyond just holding the insurance?

Yes. Accurate wage records and accident details support a claim if one arises, and are the employer's responsibility to maintain, not something the insurer handles alone.

How it fits with other cover

Is EC the same as group medical insurance?

No. EC is compulsory and covers only work injuries and illness. Group medical is voluntary and covers healthcare generally, whatever the cause. See our full comparison.

Should I buy EC and group medical together?

Many employers do, through the same broker, which simplifies renewals and claims support considerably compared with two separate, unconnected relationships. See our guide to Employees' Compensation versus group medical for how the two work together.

Does MPF have anything to do with EC insurance?

No. MPF is a separate, compulsory retirement savings obligation, entirely unconnected to work injury liability, and it sits alongside EC as the second pillar of compulsory employer obligations rather than overlapping with it.

Does my business insurance cover work injuries too?

No. General liability and other business insurance lines respond to claims from third parties, such as customers or visitors, not to injuries suffered by your own employees, which is exactly the gap EC insurance exists to fill.

Domestic helpers and small employers

How much does EC insurance cost for a domestic helper?

It is a low, largely fixed annual cost, usually arranged as part of a helper insurance package alongside the medical cover required under the standard employment contract set by the Immigration Department.

Is EC insurance different for a new small business than an established one?

No, the legal requirement and minimum cover are identical for both. The premium differs based on payroll and risk class, not on how long the business has been trading or how large it has grown.

What if my business does not fit neatly into one risk category?

A broker can work through each distinct activity separately with the insurer, which usually produces a fairer overall rating than forcing a mixed business, such as one combining an office and a warehouse, into a single category.

Can I get EC insurance if my business is considered high risk?

Yes, and if the open market is genuinely difficult, a broker can help you apply to the Employees' Compensation Insurance Residual Scheme, which exists precisely for this situation.

Get a quote or ask a specific question

If your question is not covered here, talk to an advisor, or get an Employees' Compensation quote directly.

How this page connects to the fuller guides

Each answer above is deliberately short, since the point of this page is a fast reference rather than a full explanation. Where a question clearly needs more depth than a short answer can properly give, the link points to the guide built specifically for that topic, whether that is the mechanics of how the premium is calculated, the exact reporting deadlines and process after an injury, or how EC relates to the rest of a company's benefits and business insurance. Treat this page as the starting point, not the final word, on anything genuinely important to your specific situation, and use the full guides whenever the stakes of getting the answer right are higher than a quick reference can responsibly support, particularly for anything touching an active claim or a compliance deadline.