Introduction
Commercial insurance indemnity
Employment injury insurance benefits
Tort damages
Comment
Although modern shipbuilding technology, risk prevention and control capabilities are quite advanced, marine accidents that cause death or bodily injury to crew members still occasionally occur due to the dangers inherent in maritime navigation. Questions concerning the compensation that crew members or their statutory close relatives can obtain may arise in the wake of such tragic accidents.
This article discusses such issues in the context of claims made under the jurisdiction of the Chinese courts with Chinese law applied. Multiple parties may be liable for death or bodily injury suffered by crew members, including insurers, employers and tortfeasors. The compensation that crew members or their statutory close relatives can obtain from such responsible parties is as follows.
Commercial insurance indemnity
If employers have purchased commercial personal accident insurance for crew members, the insurer shall pay insurance indemnity to the beneficiary if crew death or bodily injury falls within the scope of its liability.
The beneficiary is likely to be the crew members themselves or their statutory close relatives. Article 39 of the Insurance Law stipulates as follows:
The beneficiary in personal insurance shall be designated by the insured or insurance applicant.
The insurance applicant shall obtain the consent of the insured when designating the beneficiary. Where the insurance applicant takes out personal insurance for any employee who has a labour relationship with the insurance applicant, the insurance applicant shall not designate any person other than the insured or the next of kin thereof as the beneficiary.
Employment injury insurance benefits
If an employee suffers an injury while at work, the employment injury insurance benefits (a type of Chinese public and social insurance) that can be obtained normally include:
- medical expenses;
- a lump-sum disability subsidy;
- a disability allowance;
- a lump-sum employment injury medical subsidy and a lump-sum disability employment subsidy;
- a meals allowance for use during a period of hospitalisation;
- transport, meals and accommodation expenses;
- auxiliary device expenses; and
- nursing care expenses.
If an employee dies while at work, the employment injury insurance benefits obtainable include:
- a funeral subsidy;
- a pension to support statutory close relatives; and
- a lump-sum subsidy for death from work.
In addition, the crew member or their statutory close relatives are entitled to both the commercial insurance indemnity and employment injury insurance benefits. This was clarified in a Supreme Court case in 2017.(1)
Facts
On 8 July 2012, Mr An Dongwei entered into an employment contract with Shenzhen Shuiwan Ltd. Shenzhen Shuiwan purchased a group personal accident injury insurance for its crew members, including An Dongwei.
On 5 August 2013, the vessel An Dongwei worked on entered into distress and turned on its side. On 16 January 2014, An Dongwei was declared dead.
An Dongwei's parents obtained death compensation from the aforementioned group personal accident injury insurance. They sought to claim employment injury insurance benefits from the defendant as well.
Decision
The Court decided that where an employer purchases commercial personal accident injury insurance for its employee, the employer cannot thus be exempted from its statutory duty of purchasing employment injury insurance for the employee. After obtaining commercial insurance indemnity, the employee still has the right to claim employment injury insurance benefits against the employer.
Generally speaking, if the tortfeasor causes death or bodily injury of a crew member, it shall be liable for damages, but when the tortfeasor is the employer, the situation is different.
If tortfeasor is not employer
If the tortfeasor is not the employer, the crew member or their statutory close relatives are entitled to both tort damages from the tortfeasor and employment injury insurance benefits, but medical expenses may only be obtained from one liable party.
Article 3 of the Supreme People's Court's Interpretation on Certain Issues Concerning the Application of Law to the Trial of Cases on Compensation for Personal Injury (the Personal Injury Interpretation) states as follows:
Where an employee suffers a personal injury due to a tort by a third party other than the employer, and the obligee to compensation requests the third party to bear civil liability for compensation, the People's Court shall support the request.
Article 8 of the Provisions of the Supreme People's Court on Several Issues concerning the Trial of Administrative Cases on Employment Injury Insurance states as follows:
Where an employee has suffered injuries from work due to the reason of a third party, but the social insurance agency refuses to pay for the employment injury insurance benefits on the ground that the employee or its next of kin has filed a civil lawsuit against the third party, the people's court shall not support the decision. But if the third party has paid for medical expenses, the social insurance agency is exempted from paying such expenses.
If tortfeasor is employer
If the tortfeasor is the employer, the crew member or their statutory close relatives are only entitled to employment injury insurance benefits.
Article 3 of the Personal Injury Interpretation states as follows:
Where an employee suffers a personal injury in an employment injury accident, and the employee or its next of kin brings a lawsuit to the people's court requesting the employer to bear civil liability for damages, it shall be advised to deal with the matter in accordance with the provisions of Regulations on Employment Injury Insurance.
When a crew member suffers death or bodily injury, multiple parties – including insurers, employers and tortfeasors – may be liable to compensate the crew member or their statutory close relatives.
Where employers have purchased commercial personal accident insurance for crew members, the crew member or their statutory close relatives are entitled to both the commercial insurance indemnity and employment injury insurance benefits.
Where the crew member's death or bodily injury is caused by tortfeasors, and where the tortfeasor is not the employer, the crew member or their statutory close relatives are entitled to both tort damages from the tortfeasor and employment injury insurance benefits, but medical expenses may only be obtained from one liable party. When the tortfeasor is the employer, the crew member or their statutory close relatives are only entitled to employment injury insurance benefits.
For further information on this topic please contact Jin Yu-Lai at KaiRong Law Firm by telephone (+86 21 5396 1065) or email ([email protected]). The KaiRong Law Firm website can be accessed at www.skrlf.com.
Endnotes
(1) Mr An Minzhong and Ms Lan Zijiao v Shenzhen Shuiwan Offshore Fishing Co, Ltd.