In Portugal, every employer with employees must hold workplace accident insurance (seguro de acidentes de trabalho), and self-employed workers must insure themselves. Anyone who fails to do so faces a fine for a “very serious” administrative offence and, more importantly, must personally pay everything the law guarantees to an injured worker. Here is who is covered and what happens in practice.

Who must have the insurance

The rule is in Article 79 of Law 98/2009: employers must transfer their liability for workplace accidents to an entity legally authorised to provide this insurance, in other words, an insurer.

The law applies to employees in any activity, whether or not it is run for profit. In practice this includes:

businesses of any size, including micro-businesses with a single employee;
sole traders with staff;
associations, foundations, clubs and other non-profit bodies;
private households employing a cleaner, gardener or nanny, including foreign owners of homes in Portugal;
trainees, apprentices and interns on practical training, whom the law also covers.

For self-employed workers (trabalhadores independentes), the obligation comes from Decree-Law 159/99: they must insure themselves. The only exception is for those whose output is exclusively for their own and their household’s consumption.

What the insurance covers

The policy guarantees the worker the benefits set by law after a workplace accident, including, under certain conditions, on the way to and from work. In simple terms:

Benefits in kind: medical and surgical care, medicines, hospital stays, transport, prostheses and rehabilitation.
Cash benefits: compensation while the worker is temporarily unable to work (for total temporary incapacity, 70% of pay for the first 12 months and 75% thereafter), pensions for permanent incapacity and, in the event of death, pensions for family members and funeral expenses.

That is why the insurance protects both sides: the worker’s compensation is guaranteed and the employer is not exposed to costs that can last for decades.

What happens without insurance

A fine for a very serious offence

Having no insurance is classed as a very serious administrative offence (contraordenação muito grave), enforced by the ACT, the Portuguese labour inspectorate. Fines follow the Labour Code and depend on the company’s turnover and whether the breach was negligent or deliberate. For a business with turnover under €500,000, the limits range from 20 to 95 “units of account”: at €102 per unit, roughly €2,040 to €9,690. For larger companies, fines can exceed €60,000.

The employer pays everything directly

This is the consequence that really matters. Without insurance, liability for the accident does not disappear: it falls entirely on the employer. That means paying for treatment, compensation and, in serious cases, lifelong pensions. A single serious accident can threaten the survival of a small business.

The Workplace Accident Fund

The Workplace Accident Fund (Fundo de Acidentes de Trabalho), managed by the insurance supervisor ASF, guarantees pension payments to the worker when the party responsible cannot pay, for example, due to insolvency. The worker is protected, but the employer is not released from liability.

Insured, but with pay under-declared

There is an in-between situation that also causes problems: having a policy, but with pay declared below the real figures. If an employee earns more than the amount declared to the insurer, the insurer only covers the declared amount and the employer is liable for the difference. The same care applies to new staff: they must be added to the policy before they start work.

How to check you are properly insured

I recommend a simple review at least once a year:

Is every employee included in the policy (or declared monthly, if the premium is variable)?
Does the declared pay include base salary, holiday and Christmas allowances and other regular payments?
Do the business activity and job descriptions match what is actually done?
If you have domestic staff at home, are they insured?

For foreign-owned businesses and holiday-rental operators in Portugal, the same rules apply: if you have staff here, Portuguese law requires this insurance, wherever the owners live.

Frequently asked questions about workplace accident insurance

Does a company run only by its managing partners need this insurance?

It depends on how the partners work and are paid, and there are specific rules for these cases. I prefer to look at the actual situation before answering, because it is not a simple yes or no.

Does personal accident insurance replace workplace accident insurance?

No. Personal accident insurance is optional and its cover is set by the contract. Workplace accident insurance is compulsory and guarantees benefits fixed by law. They can complement each other, but one does not replace the other.

I have a part-time employee. Do they need to be insured?

Yes. The obligation does not depend on hours worked: every employee must be insured. The premium is calculated according to pay and activity.

If you would like to confirm that your business is properly covered, I will review your situation with no obligation: request your workplace accident insurance review here.

Sources

General information only. It does not replace reading your policy conditions or personalised advice.