If you are a self-employed entrepreneur in Portugal, you will need a Workers Compensation Insurance (Acidentes de Trabalho). This is a mandatory insurance (Decreto-Lei 159/99). Without it, you commit an administrative offence punishable by a fine, and you have no cover after a work accident.
I know, I know, self employed persons are special people. Very hardly you will get sick cause all your strength and motivation is focused in constructing your business! And although entrepreneurs are super motivated people, everyone is vulnerable to accidents and illnesses. And as a self-employed person if you are unable to work due to an injury or illness, you could find yourself in financial trouble very quickly.
Also, if you cannot work who’s going to pay your debts or finish your projects? That’s why it’s so important to have disability insurance. Disability insurance provides you with a replacement income if you are unable to work due to an accident or illness. It can help you pay your medical bills, support yourself and your family, and maintain your lifestyle. In short, it gives you the peace of mind that comes from knowing you are protected financially if something happens to you.
Workers Compensation Insurance
In Portugal, there’s a mandatory insurance for all workers, self-employed or hired workers, called Workers Compensation Insurance “Acidentes de Trabalho”. This is a type of insurance that provides coverage for employees and self-employed persons if they have a work accident. In case of employees this insurance is hired and paid by the Company that employs them, but in case of self-employed workers, is a cost that must be supported by the entrepreneur.
So, if you are self-employed, you will need a “Acidentes de Trabalho” insurance.
Self-employed Workers Compensation Insurance (Acidentes de Trabalho – Trabalhador Independente)
The Workers Compensation Insurance provides benefits to self-employed workers who have an accident at work or on the way to work, covering medical expenses and part of the lost income. Also provides benefits to workers who are permanently disabled as a result of their injuries and cover death benefits to the families of workers who die as a result of a work accident. This insurance is an important part of the social safety net in Portugal. It protects workers and their families from financial hardship after a work accident.
Workers accidents can occur due to a variety of factors, such as slips and falls, exposure to hazardous materials, or even car accidents while on the job or driving to the job. No matter the cause, “Acidentes de Trabalho” insurance can help to mitigate the financial impact of an accident and provide peace of mind for both employees and employers.
Important: this insurance covers work accidents, not illness. Sick leave due to illness (baixa por doença) is a matter for the Segurança Social; according to the social security institute, self-employed people receive sickness benefit from the 11th day, or from the first day in hospital. You can bridge the first ten days of illness with savings or private daily sickness cover. Occupational diseases are also handled by the Segurança Social. For temporary total incapacity after a work accident, the insurance pays 70% of the insured remuneration per day in the first twelve months and 75% after that, from the day after the accident (Lei 98/2009, Articles 48 and 50, applied to the self-employed through DL 159/99). Two examples:
Example 1 “Road Accident”
- On your way to the shared office you have a car accident. You will need an operation and the recovery process takes 2 months. You declare “accident of circulation on the way to your work”. The “Acidentes de Trabalho” insurance pays the treatment costs and, from the day after the accident, 70% of your insured remuneration.
Example 2 “Lost a Hand”
- On the way to see a client you have a car accident and lose a hand. You will need an operation and the recovery process takes 6 months. You declare “work accident”. The “Acidentes de Trabalho” insurance pays the treatment costs, 70% of your insured remuneration from the day after the accident, and for the lost hand a prosthesis and an indemnity under the statutory rules for permanent incapacity.
So, as you can see Acidentes de Trabalho is a very helpful insurance to have. Workers insurance is a state-mandated insurance that is heavily regulated. This means that there is very little difference in the coverage that is offered by different insurance companies. The covers are fairly similar, and the prices are only slightly different.
The downside is that for temporary total incapacity it pays only 70% of the insured remuneration in the first year, and all benefits depend on the insured remuneration: if you insure only the minimum, you receive little. Also, this insurance only covers if the accident is related to work, so if you have a injury due to playing football on your free time, that won’t be covered. To counteract you can hire a supplement insurance called “Personal accidents”.
In case of an accident (work related or not), this insurance can pay a daily allowance if agreed; check from which day. It can close the gap between the 70% paid by the compulsory insurance and your income. Here is an example.
Example 3
You are self-employed and a declared monthly income in Portugal of 2.000€. You have a car accident and can’t work for 5 months. The mandatory Self-employed Workers Compensation “Acidentes de trabalho” kicks in and, if your income is fully insured, pays 70% of it (1.400€ a month).
Your complementary accident insurance (Acidentes Pessoais) also kicks in; if its daily allowance is agreed accordingly, you receive the other 30% (600€ a month). So, during these 5 months that you cannot work, you receive your full declared income (70% from the mandatory insurance and 30% from the complementary accident insurance).
How much it costs?
As an example, if you are a self-employed informatic with a 24.000 euros income a year, this mandatory insurance starts at 240 euros per year (basic cover). Then there are products with additional covers, that also include a capital in case of death, and an extra daily subsidy in case of hospitalization, and the premiums are around 360 euros per person / year…
So, but if you want to have a more complete cover? Can you insure the 100% of your monthly income? Can you increase the values of compensation in case of accidents or disabilities? Yes, you can, do that by hiring a complementary insurance of accidents (Individual Personal Accidents) .
What is Individual Personal Accident Insurance?
In the event of an accident, Individual Personal Accident Insurance covers the payment of capital for death and permanent disability, daily indemnities in the event of temporary disability or hospitalisation, treatment costs, medical transport and repatriation, search, rescue and salvage costs, funeral costs. Some products also give access to the 2nd medical opinion service provided by Best Doctors and compensation for loss or damage to luggage during travel due to treatment carried out by the Insured Person.
Personal Accident Insurance aims to provide financial support to the family of the Insured Person, when the latter is the victim of an accident-causing death, permanent disability or temporary incapacity.
In short, if you are a self-employed person, Personal Accident Insurance may be taken as a complement to the compulsory “Workers Compensation Insurance”. If the accident is a work accident, it pays on top of the compulsory insurance; if it is not work related, it is the only cover that pays, up to the sums agreed.
How much it costs?
The cost of a Personal Accident Insurance in Portugal depends of your profession, age and yearly income, but it can start at 140 euros per person/year or cost around 250 euros for a more comprehensive cover.
In conclusion,
Entrepreneurs face a unique set of risks when it comes to their finances. Not only do they have to worry about the usual risks associated with business, such as market fluctuation and customer defaults, but they also have to contend with the possibility of personal injury.
Accident insurance is an important tool for protecting entrepreneurs from the financial consequences of an accident. Without insurance, an entrepreneur who is injured in an accident could be facing a medical bills, lost income, and other expenses. Accident insurance can help to cover these costs, providing peace of mind and financial security in the event of an accident.
With insurance, you can protect yourself and your business from the financial consequences of an accident or illness. There are many different types of insurance available, so it’s important to choose the right one for your needs.
I highly recommend speaking with an insurance broker like C1 Broker, to find the best policy for you.
We will take the time to understand your business and your needs, and then find the policy that best fits those needs. Don’t wait until it’s too late – make sure you’re protected with the right insurance.
