XN000022-1995-06-21 — Page 32

—

14 -

Definitions of "company", "holding company", "group of companies" and "subsidiary" are also added to section 38, through clause 3.

Proposed section 40(1) is amended, through clause 4, to clarify that the minimum amount of insurance cover to be purchased by an employer in respect of his liabilities under the Employees' Compensation Ordinance and independently of that Ordinance, shall not be less than the amount specified in the proposed Fourth Schedule. Correspondingly, the Fourth Schedule is amended, through clause 9. Instead of specifying therein a minimum insurance cover for all employers, the proposed minimum is $100 million per event in the case of employers employing not more than 200 employees, and $200 million per event if the number of employees exceeds 200. This amendment is to address Members' concern that reasonable and adequate compensation should be provided for employees in case of an accident involving a large number of victims.

Proposed section 40(1AA) is added, through clause 4(2), to provide that a principal contractor in the construction industry may take out a blanket policy of an insurance for an amount not less than that specified in the Fourth Schedule, that is, $200 million per event, in respect of his liability and those of his sub-contractors under the Ordinance and independently of the Ordinance. The blanket policy will suit the complex circumstances of construction sites where vertical and lateral cross-liabilities may arise. The proposed minimum insurance is specified in the Fourth Schedule in clause 9.

Proposed section 40(1AB) is added, through clause 4(2), to provide that a group of companies may take out a blanket policy of insurance for an amount not less than that specified in the Fourth Schedule, that is, $200 million per event, in respect of the liabilities of the companies, bodies corporate and corporations in the group under the Ordinance and independently of the Ordinance. This proposed minimum is specified in the Fourth Schedule in clause 9.

Proposed section 40(1C) is added, through clause 4(2), to clarify that the minimum amount of insurance cover each employer is required to take out will be ascertained by reference to the number of employees in relation to whom the policy is in force and in accordance with the provisions of the Fourth Schedule. For principal contractors in the construction industry and group companies, the minimum amount of insurance to be taken out will be irrespective of the number of employees and in the case of principal contractors in the construction industry, the policy is also irrespective of the number of sites on which construction work is undertaken by the principal

contractors.

+