Construction Insurance –Claims Handling Procedures

15 March 2016

Brief Review

• Contractors’ All Risks (CAR) – Section I– Section II

• Employees’ Compensation (EC)

Brief Review – CAR• CAR – Section I

– Material Damage (Temporary & Permanent Works but excluding Constructional Plant and Temporary Buildings)

– Professional Fees– Removal of Debris (RoD)– Temporary Buildings* – Constructional Plant (other than Tower Cranes)*– Tower Cranes*

*listed items with corresponding insured amount

Brief Review – CAR

• CAR – Section II– Accidental bodily injury (including death) and/or loss

or damage to physical property caused by theInsured including all costs and expenses of litigation

Brief Review – CAR Major Endorsements• Vibration or Removal or Weakening of Support• Testing and Commissioning • Designer’s Risk• Inland Transit• Offsite Storage• Extra Charges for overtime, night work• Employer’s / Principal’s Property• Employer’s employees as Visitors

Brief Review – EC – Chapter 282 • Application

– An employer is liable to pay compensation in respect ofinjuries sustained by his employees as a result of anaccident arising out of and in the course of employment;or in respect of occupational diseases specified in theOrdinance suffered by the employees.

– The Ordinance in general applies to employees who areemployed under a contract of service or apprenticeship.Employees who are injured while working outside HongKong are also covered if they are employed in Hong Kongby local employers.

Brief Review – EC – Chapter 282

• Assessment of Loss of Earning Capacity– A two-tier system - Employees' Compensation (Ordinary

Assessment) Board and Employees' Compensation (SpecialAssessment) Board - is provided for to assess the necessaryperiod of absence from duty and the percentage of loss ofearning capacity permanently caused to the employee as aresult of the work injury.

Brief Review – EC – Chapter 282 • Compensation for death

(1) - Maximum monthly earnings = HKD26,070.00(2) - Minimum amount of compensation for death = HKD375,950.00

Age of deceased employee Amount of compensationunder 40 84 months' earnings(1) or minimum amount

of compensation(2),whichever is higher40 to under 56 60 months' earnings(1) or minimum amount of

compensation(2), whichever is higher56 or above 36 months' earnings(1) or minimum amount

of compensation(2),whichever is higher

Brief Review – EC – Chapter 282

• Funeral and medical attendance expenses in fatal cases– Any person who has paid funeral and/or medical attendance

expenses on an employee who died in a work-related accident is entitled to claim reimbursement from the employer of the deceased employee of such expenses not exceeding HKD76,220.00.

Brief Review – EC – Chapter 282 Compensation in cases of permanent total incapacity

(1) - Maximum monthly earnings = HKD26,070.00(2) - Minimum amount of compensation payable for permanent total

incapacity = HKD426,880.00

Age of deceased employee Amount of compensationunder 40 96 months' earnings(1) or minimum amount

of compensation(2),whichever is higher40 to under 56 72 months' earnings(1) or minimum amount of

compensation(2), whichever is higher56 or above 48 months' earnings(1) or minimum amount

of compensation(2),whichever is higher

Brief Review – EC – Chapter 282 Periodical Payment• An employee is entitled to receive periodical payments during the

period of temporary incapacity (sick leave) up to 24 months. The payment should be calculated as follows:

Monthly earnings Monthly earnings ( at the time of less after ) X 4/5

the accident the accident

• If the employee's temporary incapacity lasts more than 24 months, he may apply to the Court for an extension of his entitlement for the payment. The extended period shall not be longer than 12 months.

Brief Review – EC – Chapter 282 Medical Expensesthe medical expenses for each day of stay in the hospital where an employee is given medical treatment as an in-patient

HKD200.00

the medical expenses for each day on which an employee is given medical treatment other than as an in-patient in a hospital

HKD200.00

the medical expenses for each day on which an employee is given medical treatment both as an in-patient in a hospital and other than as an in-patient in a hospital

HKD280.00

Brief Review – EC – Chapter 282

Settlement of Claims• Depending on the nature of the case, a claim for employees'

compensation can be settled in the following ways: – Direct Payment – Determination of compensation by agreement according to the

Ordinance– Settlement by Certificate – Settlement by Court

Claims Procedure

• The above Form must be made in 2 copies, 1 copy to Labour Department and 1 copy to insurance broker / insurance company for handling

Situation Form Submission Deadline# of sick leave is 3 days or less

2B Within 14 days

# of sick leave is more than 3 days

2 Within 14 days

Death 2 Within 7 days

Claims ProcedureApart from Form 2 / Form 2B, the below documents must be enclosed for handling:• Copy of ID of the Injured; • Copy of Construction Workers Registration Card and

Construction Industry Safety Training Certificate of the Injured

• Original Copy of Sick Leave certificate;• Original Copy of Medical Expenses receipt;• Payment Receipt signed by the Injured acknowledging

receipt of the compensation

Claims Procedure(Cont’d)• MPF Record• Employment contract (and its amendments)• Copy of Payroll record for the past 12 months prior to

the accident • Copy of Payroll record for the past 12 months of 2

comparable workers of the same type if the Injured is employed for less than 1 month

• Copy of sub-contracting contract between Main Contractor and Sub-contractor

Claims Procedure

• After Assessment by the Labour Department, the below documents must also be submitted• Form 5 – Certificate of Compensation Assessment• Form 6 – Certificate of Compensation Re-Assessment• Form 7 – Certificate of Assessment • Form 9 – Certificate of Review of Assessment

Claims Procedure

Legal Documents• Should you receive any legal documents e.g. writ of

summons, please save 1 copy for yourself and submit a copy to us for handling

• Do not reply or admit any liability • Legal action can only be taken within 36 months from

the date of accident

Claims Example – Case 1• Type of Works: Building A&A Works• Type of Loss: Water Damage to Busbars – falls

under Nominated Sub-contractor (NSC)• Involved Cleaning and Replacement

What do you need to prepare to submit this Claim?

Case 1 – Procedure • Claim Form (to be provided by Insurer)• Description of exact location of the incident• Photos of the surrounding areas and the damaged

parts• Incident Report(s), if any• Any letters issued by Consultant or Employer or NSC• All Invoices / Billings

*For this case, since there is a replacement of busbars, the removed busbars becomes the property of Insurer which must return to the appointed Loss Adjuster or Insurer’s representative

Claims Example – Case 2• Type of Works: Water Mains Construction• Type of Loss: Burglary at Site

What do you need to prepare to submit this Claim?

Case 2 – Procedure • Claim Form (to be provided by Insurer)• Police Report• Description of exact location of the incident • Photos of the incident location• Incident Report(s), if any• Description of Loss items and its cost with supporting

documents• CCTV footage, if any

*Loss Adjuster normally will be appointed for such case. Please only clean up the incident area after Loss Adjuster has conducted their investigation.

Claims Example – Case 3• Type of Works: Building A&A Works• Type of Loss: Fire Damage• Works are at least 50% completed• Building collapsed due to fire damage• Damages to 3rd parties are also reported

What do you need to prepare to submit this Claim and what can be covered?

Q & A

Contacts

Westfield Holdings LimitedChristopher ChengDirect: (852) 2510-7999Tel: (852) 2510-7299Fax: (852)2510-7566E-mail: christopher.cheng@wfhl.hk