Employers’ Liability Insurance – all you need to know

Employers’ Liability Insurance. Although it may sound like it does what it says on the tin, there is a lot to unpack. In today’s world of remote working, this is an important concept to grasp  – particularly in the supply chain. So you have looked at your hiring budget, understand social insurance, and perhaps even found the ideal candidate. Now it’s time to look at your responsibilities when building a team in China. First, of course, no responsibility is more salient than the safety of your employees.

What is Employer’s Liability Insurance?

Before we go into detail, it is essential to remember that China labour law is very much pro-employee. In a dispute, the employee will have a distinct advantage over the employer, and it is the employer’s responsibility to provide a safe working environment.

So it is essential to have insurance and a strict code of conduct at work.

Employer’s Liability insurance covers damages for claims from an employee in the event of personal injury or death whilst employed by your company. This cover includes all work-related events, including, as the Bank of China has put it:

• The accident happens during work, in the workplace, and for work-related reasons.
• The accident happens before or after working hours and in the workplace when an employee engages in job-related preparation or ends work.
• The accident happens during work and in the workplace when an employee faces violence whilst performing duties.
• The employee’s disease is diagnosed and identified as an occupational disease.
• Suffering from an injury due to work or missing due to an accident during the workout period.
• Suffering from traffic accidents injury on the way to or from work.
• A death caused by sudden illness or after the rescue invalidly within 48 hours during working hours and in the workplace.
• Other situations as agreed in the insurance contract.

You may have read in our social insurance blog that social insurance often covers injury. However, such insurance far from covers the potential liability undertaken by an employer, so ELI is an absolute must.

The compensation amount will include medical expenses, legal fees and any other financial compensation arising from the injury.

So how do you make sure your cover protects you against such claims?

Kinyu’s insurance policy will cover all personnel employed under The China Desk. You can learn more about our policy here. If hiring personnel on the ground through an HR agent, you must clearly understand the policy and how it will affect you.

Different working environments will require other policies, so if you have a company in China or a partnership, it is best to seek advice from an insurance broker or professional.

What providers?

Some prominent providers are PIngAn, Taiping and Zhonghong, but many companies provide insurance to cover different occupations. Some examples of brokers include Marsh and Asian Risks. It is worth speaking to a broker to get good guidance on the best policy for your circumstances. The Kinyu Resource Platform has HR consultants who can advise you on the best policy.

What does it cover, and how much?

A basic example of an insurance policy is as follows:

• Up to CNY 1,000,000 for accident/death
• Up to CNY 100,000 for medical support
• In-patient subsidy is 150 CNY /day, up to 90 days
• Income subsidy during treatment, 150 CNY/day, up to 90 days.
• 24 hr coverage.

Please note this does not constitute an offer of insurance but only indicative information. All policies come with extensive terms and conditions attached. Please contact a broker or insurance company for professional advice.

What other precautions should I put in place?

Health and Safety: It’s essential to have robust health and safety guidelines for all employees. You should not allow your team members to travel for work without giving prior knowledge to your China HR team.

Geography Coverage: Most policies only cover mainland China and do not include Hong Kong, Macao or Taiwan. Therefore if your employee needs to travel for work outside of Mainland China, you must consider additional cover.

High-Risk Areas: There are some areas in Mainland China where insurance does not cover elements of medical expenses. These areas are not necessarily that obvious, so it is essential to check the specific policy details

Salary, Age, and Occupation: These are factors you must consider when evaluating which coverage is best for your company.

Factory/supplier ELI: If your employees have to visit factories or other areas with increased occupational hazards, those companies may not have appropriate systems or adequate insurance. Unless certified, your employees must not do anything requiring training on these sites.

Congratulations on making it through this article! There is a lot to digest, but it’s all imperative when operating in China. If you have more questions about this and hiring in China – feel free to get in touch.