26 March, 2015
It is quite a common arrangement that an employee of an overseas parent company (the “Home Entity”) to be seconded to work for a group company in Hong Kong (the “Hosting Entity”) for a certain period of time. Under such arrangement, it is usually an agreed arrangement that the seconding staff member remains an employee of the Home Entity, and in such circumstances, he/she is not covered by the employees compensation insurance scheme of the Hosting Entity as the seconding staff member is not an employee of the Hosting Entity. In case the seconding staff member suffers from any injury during the secondment period, is the Hosting Entity subject to any insurance protection?
It is usually thought that the Hosting Entity is protected by its public liability insurance scheme which provides protection to it in case it has any liability arising from any injury/lost suffered by any third party. However, for some insurance policies, there is an express exemption excluding protection in relation to seconding staff members. If this is the case, it appears that the Hosting Entity may not have sufficient insurance coverage in case seconding staff members suffer from any injuries in the course of their secondment. It is advisable for the Hosting Entity to liaise with its insurance company regarding the coverage, and the Home Entity regarding its duty to insure the seconding staff members during their stay in Hong Kong.
For further information, please contact:
Elsie Chan, Deacons
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