Workers Compensation Insurance

Workers Compensation Insurance

Workers Compensation Insurance is a mandatory insurance by law in Portugal that aims to protect workers in case of accidents occurring during the performance of their work duties or on the route between home and work.
The coverage includes medical, hospital, and pharmaceutical care, as well as compensation for temporary, permanent disability, or death.

Who is required to have this insurance?

Employees (workers under contract):

• The employer is legally required to take out this insurance for all their workers, regardless of the type of contract (full-time, part-time, fixed-term or indefinite).

Self-employed workers (receipts “recibos verdes”):

They are also required to take out work accident insurance, including:

• Sole proprietors
• Liberal professionals
• Workers issuing “recibos verdes” (independent contractors)

Other cases:

• Professional internships
• Domestic workers
• Volunteers and collaborators in NGOs or IPSSs (in some specific situations)

What does the insurance cover?

Mandatory coverages:

• Medical, surgical, pharmaceutical, and hospital assistance
• Transport and accommodation, when necessary for treatment
• Compensation for:
  • Temporary disability (total or partial)
  • Permanent disability
  • Death (with pension to legal beneficiaries)
• Professional rehabilitation and reintegration

A work accident is considered when:

• It occurs in the workplace and during working hours
• During the commute between home and work (in itinere accident)
• During activities at the service of the employer (including outside the premises)

What is not covered by the insurance?

• Accidents outside the work context unrelated to the job
• Willful acts (intentional) by the worker
• Situations resulting from proven serious negligence

How much does it cost?

The insurance premium depends on:

• The company’s activity or profession (risk level)
• Number of workers / payroll volume
• Claims history

How to contract it?

• It must be done through an insurer authorized to operate in Portugal.
• It can be contracted: Directly (online, by phone, or at a counter); Through insurance agents or brokers

Documents and information required For companies:

• Company Tax Identification Number (NIF)
• Economic activity code (CAE)
• List of workers and their salaries

For self-employed workers:

• NIF
• Description of activity
• Estimated income volume

Consequences of not having the insurance

• High fines (which can exceed €10,000)
• Obligation to bear all costs arising from the accident personally
• Civil and criminal liability of the employer
• Risk of business closure

Accident communication When a work accident occurs:

• The worker must inform the employer immediately.
• The employer must notify the insurer within 24 hours after the accident.
• The insurer must assume the costs from that moment.

In cases of hospitalization, death, or serious situation, communication must be immediate to the competent authorities (ACT and insurer).

How does compensation work?

• Temporary total disability (TTD) – the worker receives 70% of the salary for the first 12 months (with possibility of extension).
• Partial/permanent disability – the amount is calculated based on an official disability table.
• Death – pension to dependents and payment of funeral expenses.

Inspection and involved entities

• Authority for Working Conditions (ACT) – supervises compliance with the law.
• Insurers – manage claims and pay compensations.
• Labor Courts – intervene in case of disputes.

Important Notes

Territorial scope

The contract only covers accidents at work that occur in Portugal.

Accidents at work occurring abroad involving Portuguese workers and foreign workers residing in Portugal, employed by a Portuguese company, are covered by the contract, unless the legislation of the State where the accident occurred recognises their right to compensation, in which case the worker may choose either scheme.

Travel to foreign countries

The Policyholder must notify the Insurer of any trips to European Union member countries lasting longer than 15 days and all trips to other countries, for the purposes of risk assessment and premium surcharge calculation, under penalty of being responsible for losses and damages related to medical assistance and transport or repatriation expenses.

What should be considered remuneration?

Remuneration for insurance purposes comprises everything that the Law considers to be an integral part of remuneration and all regular payments that are not intended to compensate the Insured Person for random costs, whether in cash or in kind, to which the insured person is entitled, and must be guaranteed by the gross amount, which may not be less than 14 times the Minimum Monthly Guaranteed Remuneration or that resulting from collective labour regulations.

Benefits by Work Accident Insurance

benefits in kind, including:

• General and specialist medical and surgical care, including all necessary diagnostic examinations and treatments, as well as home medical visits;
• Medication and pharmaceutical care;
• Nursing care;
• Rehabilitation and professional and social reintegration services, including workplace adaptation.

It also provides cash benefits, including:

• Compensation for temporary incapacity for work;
• Provisional pension;
• Lump-sum compensation and pension for permanent incapacity for work;
• Allowance for severe permanent incapacity;
• Death benefit;
• Funeral allowance;
• Survivor’s pension;
• Housing adaptation allowance;
• Allowance to attend vocational rehabilitation programmes and other measures necessary for the injured worker’s reintegration into the labour market.