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Adding an extra safety net |
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Written by Lucy Wang
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Covering your organisation against work-related injuries
In the previous issue of Network HR, ClarkMorgan's Tracy Carlsund talked about occupational health and safety in China and how to prevent work-related injuries. To follow-up on this Network HR decided to ask our good friends at Abacare to talk us through how best to protect your staff and your company against the costs of work-related injuries.
What are the major issues in terms of coverage for work-related injuries?
There are several factors that need to be taken into consideration. First of all there are the immediate medical expenses that have to be paid if an employee is injured at work. Should that employee then subsequently miss working time, their lost salary may also need to be covered. If an employee is killed or permanently disabled then they, or their family, are entitled to indemnities (payments made as compensation for damage, injury or loss). However, if an employee deems the indemnity paid to them to be unsatisfactory, there is also the factor of possible legal action to consider, which can quickly lead to escalating costs for an organisation.
What are the most common work-related injuries that should concern HR managers?
There are three main types of work-related injury that HR staff should definitely be looking out for. First are accidents that take place around any organisation's premises during working hours; a slip, trip or fall for example. Second is transportation, for instance this could be when employees are moving between sites or are being transported to and from work in a vehicle provided by their employer; a shuttle-bus for example. Finally there are injuries sustained when operating machinery, these are often the most serious resulting in long-term injury and missed working time.
What should HR staff consider when choosing a provider to cover their organisation for work-related injuries?
The Chinese government requires companies to have social insurance that covers medical expenses, indemnity for both death and disablement, and also other potential costs. On top of that a company can choose to purchase liability insurance from a commercial insurance company. This type of policy will make up the shortfall between an employer's legal liability and the areas covered by social insurance - the obvious example of this are legal costs incurred if an employee chooses to sue.
When searching for a provider, HR staff need to ask the following questions: Can the provider offer all the coverage you need? Can that provider offer a clear explanation in regards to what their coverage includes and what their claims procedure entails? Does the provider have the relevant experience in terms of employer liability? (There are several companies who offer policies for employers but operate mainly in the field of car insurance.) And finally everyone's big concern, does the provider offer a reasonable price?
Are work-related injuries an area in which insurance coverage in China is growing?
With developments in Chinese law, more and more employers are concerned about their liability to their employees. I have found that on average around 10% of companies who have primarily office staff purchase liability insurance, whilst around 90% of factory-based employers were making the same purchase. However, I do believe that number is growing and will continue to do so.
How flexible is current coverage for work-related injuries?
Considering that work-related social insurance is mandatory and covers - amongst other things - medical expenses and indemnities, employers can choose simply not purchase liability insurance beyond that. However, for those who do opt for extra liability cover there are many options, in fact most providers will tailor a policy to your organisation's needs. For example you can choose to indemnify based on each employee's monthly salary using a fixed amount for a set group of staff.
What should be the priorities of HR staff looking to protect their staff?
In order to determine how an organisation can best protect their staff, HR professionals need to consider what coverage they will purchase in addition to mandatory social insurance. Good HR staff, when discussing insurance options, will take into account the specifics of their particular organisation and the risks it faces, the budget with which they have to work and the condition of their employees.
For instance, an organisation that employs a large percentage of factory workers needs to think about the higher potential risks their employees face when operating machinery and the potential costs that could be incurred by injuries sustained in this environment. Because of this, their top priority should be to ensure that their company is in a position to meet these costs. In this situation they need to focus on finding a liability package that covers all legal eventualities.
For a company with a primarily office-based workforce however, the priorities are different. The chances are that their employees work in a far safer environment, where serious injury is much less likely to occur. In that case, HR staff can consider finding coverage that not only protects, but offers other benefits. For instance Commercial Comprehensive Insurance will offer employees much more varied coverage and can be used by employers as an incentive to retain employees.
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