Employer’s Guide to Employee Compensation Insurance in Hong Kong


Employee Compensation Insurance or EC Insurance is a liability cover specific for businesses with hired workers. This is mandatory in Hong Kong for all businesses.

According to Section 40 of the Employees’ Compensation Ordinance, Chapter 282 of the Laws of Hong Kong, no employer shall employ any employee in any employment unless there is in force a policy of insurance to cover their liabilities both under the Ordinance and at common law for injuries at work in respect of all their employees, irrespective of the length of employment contract or working hours, full-time or part-time, permanent job or temporary employment.

This ordinance also applies to domestic helper insurance but will vary in cost and coverage.

An employer who fails to comply with the Ordinance to secure an insurance cover commits an offence and is liable on conviction to amaximum fine of HK$100,000 and imprisonment for two years.


  • Minimum insurance cover


  • Full cost of insurance CANNOT be deducted from your employees’ earnings. A breach in this ordinance makes the employer liable to a fine of $10,000 and 6 months imprisonment.
  • When you add more employees to your business, make sure you contact your insurance provider to discuss any adjustments.
  • Ask if the Employee Compensation Insurance covers subcontractors. You are not required to take out a policy for them as there is another type of insurance they can arrange for themselves. You can read our blog about being an expat contractor in Hong Kong here.
  • Take note of sick leaves and medical expenses in case an employee is injured during work.

Some information for Employers and Employees

Employee Compensation Insurance covers the following:

  • medical care from injury or illness
  • replacement income (start date may vary)
  • costs for retraining
  • compensation for any permanent injuries
  • benefits to survivors of workers who are killed on the job
  • policy does not cover pain and suffering
  • some policies can cover long term and permanent injuries
  • volunteers workers may also be covered by some policies

Once an employee makes a claim, they forfeit any chances of pursuing a legal complaint against the company.



How to Open A Startup Business in Hong Kong

Hong Kong is currently number 8 of the top 10 cities for startup businesses according to Forbes.  There is a rapid globalization of the startup culture in Hong Kong.  Technology,  education,  healthcare  and clean energy startups have been emerging throughout the city since 2014. Hong Kong has a lot to offer expats who wish to establish their own small business.

Opening a business in Hong Kong is easier than other Asian countries. This is because the government has a quick, easy and affordable process that helps expats with their startups. All the information you need can be found here and most of the processes can also be done remotely. There are also Hong Kong formation companies you can hire to take care of the whole process for you which is convenient if you have limited time and patience for these kinds of things.

There are 5 basic needs for a Hong Kong startup:


Getting a virtual office is the quickest and cheapest way to get a business address in Hong Kong.  A virtual office means you don’t need  to rent out an actual work space but rather you will subscribe to the services of a business address, phone and fax numbers and even a multi-lingual staff to answer your calls. This is quite convenient for businesses who are only starting out with the home office. The cost of a virtual office is about 300 to 400 USD a year. For startups who need to lease a space, there are numerous listings you can find here:Hong Kong Offices for Leasebanking

Currently, HSBC holds the  majority of small and big businesses as well as personal banking in Hong Kong. Other international banks you can try are Citibank, Standard Chartered, Lloyds Bank and Wells Fargo. The challenge for expats may be opening an account which requires you to be in Hong Kong in person. Transfers may be done electronically.visa

If you are the sole owner or own a majority of the business, you will not be eligible for a work visa. Otherwise, you can stay with a simple tourist visa and extend it for another 90 days by going over the border to China and making a trip back. There is also a type of visa called business investment visa which is for expat business owners who wish to open shop in the country. The most important documentary requirement to submit in order to apply and qualify for a business investment visa is a 2-year business plan stating the nature of the business, market analysis, market positioning, business direction, sales targets, product marketing strategy, etc. You will also need to submit a projection of profit and loss, cash flow statement and balance sheet to prove your business’ feasibility. Read the complete guide here: Business Investment Visa Info

If you’re bringing your family to Hong Kong, the business investment visa will allow you and your family to stay for 12 months after which, the government will check in to see your progress as an entrepreneur.insurance

Public Liability Insurance is a prerequisite for any startup in Hong Kong. This insurance protects the holder from claims by third parties against negligence, death, injury, loss and damage of property, and economic or financial loss.

If you’re hiring a small staff, you will also be required to have Employee Compensation Insurance. According to section 40 of The Employees’ Compensation Ordinance, no employer shall hire any employee unless there is in force a policy of insurance to cover their liabilities both under the Ordinance and at common law for injuries at work in respect of all their employees, irrespective of the length of employment contract or working hours, full-time or part-time employment. You can pay a fine of up to $100,000 and 2 years in jail if you fail to comply.

For other information on Business Insurance, read our blog here: Business Insurance in HK


Creating professional relationships and business networks is also one of the easiest ventures in Hong Kong because of the country’s thriving consumer culture. There are  numerous events for expats where you can meet fellow entrepreneurs and executives for expanding your contacts and your company. Online networking has also made this process a lot easier.  LinkedIn, Facebook and Twitter have served as lucrative platforms for getting your business off the ground.

For more information on setting up your business in HK, refer to InvestHK a government body dedicated to helping businesses within the country as well as guide them to move in Hong Kong.



Home Contents Insurance vs. Property Insurance

Every homeowner must know the value and importance of getting insurance. An insurance policy is your ultimate financial protection from external risks and damages. Accidents and natural disasters can strike at any time and the only way to be protected is to be insured.

Property Insurance and Home Contents Insurance are two separate types of policies. Home Insurance is a specialized type of Insurance that specifically protects ones private residence and its contents from loss or damage. It is a multi-line insurance policy which means it covers a holder’s property and shields them from liability

On the other hand, Property Insurance is not restricted to ones private residence but individually protects specified jurisdictions of property such as rare collections, jewelry, expensive cars, luxury flats and other such valuables.

Things to remember about Home Contents Insurance

In a survey done by the National Association of Insurance Commissioners in May of 2014 showed that participants believed flood damage, earthquake and mold problems were covered with a standard Property Insurance policy. This common assumption brings us back to the difference between the two types of policies. Home Insurance will cover the expenses of the abovementioned damages but  Property Insurance will protect items that have only been itemised for coverage.

What we also consistently remind policyholders is that claims to damages must have only recently happened (3 days to 1 week) brought about by unavoidable events. Damages incurred months ago will not be covered. Read the details on your policy to know which damages and risks are covered and find out if you will need a supplemental Property Insurance policy.

See the checklist below to know if you have adequate Home Insurance:

Liability Protection

Home Contents Insurance is not just about protecting your residence. It also protects you from certain liabilities that happened within your property. A sample scenario would be if you drove your car through your neighbor’s fence and tore through it. As the party at fault, you are obligated to pay for the damage on their fence as well as medical bills if there were people injured. Home Insurance will pay for litigation expenses and third party insurance claims in such a case. The legal costs of a defense normally do not affect policy limits unless the policy expressly states otherwise; this default rule is useful because defense costs tend to soar when cases go to trial.

High-Risk Properties and High Premiums

Homeowners must know that premiums differ for every type of property. The basis of how premiums are quoted is the number of risk factors of the property and the homeowner. Properties that are older tend to have higher premiums. Properties located in hurricane or flood prone areas will be quoted higher. Even homeowners who smoke can be charged a higher premium.

Hong Kong Property Insurance

In Asia one of the countries that have the most developed insurance markets is Hong Kong. To date Hong Kong attracts the world’s best insurance companies. In the 2012 OCI annual report documented by the HKTDC Research, the top ten players in Hong Kong’s insurance industry include: HSBC Insurance, Zurich Insurance, Chartis Insurance, Bank of China Group Insurance, Bupa, CNOOC Insurance, Lloyd’s Underwriters, Asia Insurance Company, MSIG Insurance and China Taiping Insurance. These ten companies account for 41.6 % of the total market share.

Additionally, the total gross premiums have significantly decreased, helping the country’s GDP in 2013.  Total gross premiums increased 13.9% equating to US$37.4 billion. This makes up 13.7% of Hong Kong’s GDP.

There is no denying that the Hong Kong government is taking the right steps to educate its citizens about the importance of insurance and encourage them to get covered. Attracting international insurance companies to do business in Hong Kong is certainly a sign that insurance is more than just an expense, it is a financial investment.

Get a quote for Home Contents Insurance and Property Insurance today.


Global Health Insider’s Q&A with Mark Bromhead

Global Health Insider has the chance to talk to Mark Bromhead, the Founder and Managing Director of Village Insurance Direct. Based in Hong Kong, Village Insurance has been selling corporate and personal insurance solutions throughout Asia since 2008. Despite the financial crisis then, Village Insurance has grown tremendously with the help of referrals. Find out what motivated the insurance veteran to start his own business, and how he plans to overcome the challenges ahead in our Q&A with him below.

Q: Can you tell us more about your background as an expat investment consultant and how you came to be the Managing Director of Village Insurance Direct?

I used to work as a financial advisor in Hong Kong (between 2001 – 2006) and I became disillusioned with the way the industry was going. I had clients who needed insurance advice and didn’t know who to approach. I had two young children and one on the way. From my side, I wanted to create a long-term recurring income, and I thought insurance was the perfect industry from which I can do it. I set up Village Holdings (now Village Insurance) in September 2008 and a week later, Lehmans went bust. However, the company has grown from a PA and myself to 14 staff today. It is all based around service.

Q: Which among Village’s wide range of products is the most challenging to market in Asia?

Medical insurance – the constant annual increase in premiums makes the policies harder and harder to keep on the books, as annual premium increases far outstrip rises in salaries. This will be a real problem for the industry in the future.

Q: Can your share your insights about healthcare and IPMI in Hong Kong?

As above – I think long term the industry is going to be difficult. Increases in medical insurance premiums are going to push more and more people out of the private sector, which is exactly what Governments don’t want. Policies need to become more restricted in certain areas, such as hospitals/clinics, so that there is an alternative, well-priced solution for the average expat in Hong Kong.

Read Global Health Insider’s Full Interview Here 


The Increasing Cyber Threat to Businesses

A survey of 800 risk managers and insurance experts from more than 40 countries showed that many more businesses now consider cyber incidents to be the major new threat to their business.

The 5th annual survey on corporate risks published by Allianz Global Corporate & Specialist (AGCS) further showed that businesses are concerned that cyber attacks will increasingly cause business and supply chain interruption, which has been the top risk for the fourth straight year since 2012. Cyber incidents are also cited as the most crucial long-term risk for companies in the next 10 years.

Cyber Threats in Hong Kong

Reports of hacking rose to almost 5,000 incidents year on year, up 43% in the past year according to the Hong Kong Computer Emergency Response Team Coordination Centre.

The rise was fuelled by a four-fold rise in website attacks such as phishing to almost 2,000 cases, in most cases affecting businesses, and a doubling of reported attacks on individual smartphone users to 286 cases. Cyber attacks continue unabated in Hong Kong as a rise in mobile phone hacking added to increasing rates of reported security incidents.

Financial institutions and media outlets were some of the top industries under threat last year.

Information provided to the HKMA by banks operating in the Territory indicate there were 17 reported cases related to distributed denial of service (DDoS) in December 2015. Among those breached were the Hong Kong unit of Malaysia’s Public Bank in Hong Kong wealth manager Kowloon Global.

The Cost of Cyber Attacks to Big Business

In Asia, the average cost of a cyber attack on a company in 2015 is $7.7M, according to a report by TechTrade Asia.

The Ponemon Institute sponsored by HP Enterprise Security, conducted a study, 2015 Cost of Cyber Crime Study computed for the annual cost of cybercrime for companies across 7 countries: the US, UK, Japan, Germany, Australia, Brazil and the Russian Federation.cyberthreat australia and japan_0
The study found the average yearly cost of cybercrime incurred by a benchmark sample of Australian and Japanese companies had increased by 13% and 14% respectively since last year. The results also revealed that it took at least 31 days to resolve an attack in Australia as compared to 26 days in Japan.

CyberSecurity HK provides resources and information on cyber security and threats which individuals and businesses can use.

Chubb, Zurich and AIG are some of the best providers of Cyber Insurance for businesses in Hong Kong. For assistance on Cyber Insurance, contact us here.


Expat Guide: Being a Contractor in Hong Kong

By definition, a contractor is an independent entity that is with a company or employer to provide a set of services or deliver goods within a specified time frame.

More and more businesses in Hong Kong are opening opportunities for contractual jobs because of the shift in need for more independent workers. Another reason for a greater demand for contractors is that the country has been regarded as a fertile ground for startups which usually work with a skeletal team that are not as capable of affording full time employees and the benefits that are required for such positions. Expats in particular have taken great advantage of these opportunities specifically with tech and B2B startup ventures.

There are two factors that contribute to the appeal of contractual jobs to expats. One is higher earning within a short period and the second is flexibility which allows them to pursue other personal projects while traveling.

Benefits for regular employees and contractors differ. Here is a general guideline:blog_-_table (1)

*Note that a contractor has to enroll in a Mandatory Provident Fund scheme and make contributions on his own.

Info on Mandatory Provident Fund Scheme Ordinance and Employers’ Contribution

What about Insurance?

Regular employees are entitled to Employee Compensation Insurance, which is mandatory for all employers by law. Since contractors are not technically under an employer, you will need to make arrangements for your own financial protection. The recommended policy is a generalLiability Insurance, which can be broken down into several more specific policies that cover different risks.

Contractors need protection from the following risks:

Professional Indemnity: Contractors who provide consulting and advice, such as accountants, financial planners, interior designers and landscape architects, need to be concerned about liability risks due to losses a client may experience as a result of the contractor’s recommendations. Also called “Errors and Omission Insurance.”

Product liabilities: For liability protection with goods or products you produce that may injure a third party.

Total and Permanent Disability: To protect your income in case you are seriously injured or become ill that leaves you incapable to go back to work.

For more information on business and personal insurance needs, contact us at info@villageinsirancedirect.com or fill up the forms in our website for free quotes on insurance.


Worst Case Scenario (Funny but not really)

DISCLAIMER: These are purely hypothetical scenarios aimed at putting some humor on the need for proper insurance.Blog - image 1

You’re hiking with your friends on a beautiful Sunday morning when…

You’re spending the afternoon in your favorite museum when…


It’s a quiet morning and you’re enjoying a cup of coffee when…


You finally have enough money to go on a holiday when…


A co-worker tells you you’ll be getting pay raises tomorrow when…



Cybercrime Rises: Get Cyber Insurance

Cyber hacking and other technological related crimes are on the rise in Hong Kong. The government and the business sectors have been taking more secre measures for cyber security. These facts show how cyber crime has risen over the past 5 years therefore increasing the call for cyber insurance.Infographic_7_0


Liability Insurance for Doctors

The medical industry poses great liability risks because doctors and hospital staff deal with lives everyday. Having Liability Insurance is imperative for these institutions to protect themselves from legal complaints from third parties and the financial burden that comes along with such a situation.

This news article released in 2014 about a malpractice complaint has caused alarm for hospitals and explains the importance of securing Liability Insurance for physicians and regular hospital staff.Blog_-_fact_1

With medical malpractice complaints on a steady rise since 2010, physicians in Hong Kong have lost access to patients and ultimately lose professional credibility.  The country has one of the best public and private health care facilities in the world yet this does not exclude them risks.

This type of insurance is more specifically called Medical Malpractice Insurance. It covers medical practitioners against costs of a civil suit or loss of earnings following instances of libel and slander on the doctor’s practice. It indemnifies them from medical errors that may result in serious injury and even death.Blog_-_fact_2The figure below shows the current structure for filing and resolving medical malpractice complaints. It is still considered a “chaotic” one according to both health professionals and patients; which is why the ongoing healthcare reform has been deemed a critical political necessity since it began in 2008.Blog_-_body_2

The challenge for physicians and hospitals…

The current medical malpractice complaint system has been challenging because it has not been able to provide insurance providers with accurate data for them to fine tune their insurance offers to this specific liability. The reform which still needs to be refined and approved adds to the current lack of coverage and the steadily rising cost of liability insurance premiums.

If the Hong Kong government pushes to call for a wider range of malpractice coverage, as well as providing for more care options, would spread the risk pool wider making the proposition of covering medical professional indemnity risks much more attractive for Hong Kong Insurers.

If you have any questions about Liability Insurance, send us a message on our Contact page or if you have Whatsapp, send your message to +852-6532-4047 (Whatsapp only)