Workers' Compensation Insurance

Workers' Compensation Insurance

Workers' Compensation Insurance is a type of insurance required by law in Portugal that aims to protect workers in the event of accidents occurring while performing their job duties or while commuting between home and work.
The coverage includes medical, hospital, and pharmaceutical care, as well as compensation for temporary or permanent disability, or death.

Who is required to have this insurance?

Employees (contract workers):

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

Self-employed workers (invoices known as “recibos verdes”):

They are also required to purchase workers' compensation insurance, including:

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

Other cases:

• Professional Internships
• Domestic workers
• Volunteers and collaborators at NGOs or IPSSs (in certain specific situations)

What does the insurance cover?

Mandatory coverages:

• Medical, surgical, pharmaceutical, and hospital assistance
• Transportation and lodging, when necessary for treatment
• Compensation for:
  • Temporary disability (total or partial)
  • Permanent disability
  • Death (with a pension paid to legal beneficiaries)
• Professional Rehabilitation and Reintegration

An accident at work is considered to have occurred when:

• It occurs in the workplace and during working hours
• During the commute between home and work (commuting accident)
• During activities performed on behalf of the employer (including off-site)

What is not covered by the insurance?

• Accidents outside the workplace that are unrelated to the job
• Willful (intentional) acts by the worker
• Situations resulting from proven gross negligence

How much does it cost?

The insurance premium depends on:

• The company’s business or profession (risk level)
• Number of employees / payroll total
• Claims History

How do you catch it?

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

Required documents and information For companies:

• Company Tax Identification Number (NIF)
• Economic Activity Code (CAE)
• List of Employees and Their Salaries

For self-employed workers:

• Tax ID Number
• Description of the activity
• Estimated revenue

Consequences of Not Having Insurance

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

Accident Reporting When a workplace accident occurs:

• The employee must notify the employer immediately.
• The employer must notify the insurer within 24 hours of the accident.
• The insurer must cover the costs from that point on.

In the event of hospitalization, death, or a serious situation, the competent authorities (ACT and the insurer) must be notified immediately.

How does compensation work?

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

Inspection and Entities Involved

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

Important Notes

Geographical scope

The contract covers only work-related accidents that occur in Portugal.

Work-related accidents occurring abroad involving Portuguese workers and foreign workers residing in Portugal who are employed by a Portuguese company are covered by the contract, unless the laws of the country where the accident occurred recognize their right to compensation, in which case the worker may choose either system.

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, or else be held liable for losses and damages related to medical assistance and transportation or repatriation expenses.

What should be considered remuneration?

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

Workers' Compensation Benefits

benefits in kind, including:

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

It also provides cash benefits, including:

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