In short. Royal Decree 171/2004 requires you to demand prevention documentation from your contractors: risk assessment, preventive planning for the contracted activity and evidence of the information and training given to the workers, in writing and before work begins. It does not require you to demand a liability policy or any certificate of insurance. The law covers the administrative side of the risk; the financial side is decided by you in the contract specification. And if the infringement occurred at your own workplace, article 42.3 of the LISOS can bring the penalty onto your company jointly and severally with the contractor.
In 2024 the Labour and Social Security Inspectorate devoted 5,459 actions to its specific programme on coordination of business activities and issued 1,837 infringement notices and formal requirements, according to its 2024 Annual Report. Across occupational risk prevention as a whole, the penalties proposed that year totalled €105,050,648.
The day a contractor walks through the gates of your workplace, you take on two distinct risks. One is administrative, and the law sets it out for you line by line. The other is financial, and the law does not mention it once.
What does coordination of business activities require?
The governing rule is article 24 of Law 31/1995 on the Prevention of Occupational Risks, implemented by Royal Decree 171/2004. What it imposes is not a single formality but four blocks of duties, triggered differently according to the position each undertaking occupies.
Cooperation between undertakings present at the site. Where several undertakings carry out activities at the same workplace, all of them must cooperate and inform one another of the risks they generate (article 24.1 of Law 31/1995). Article 4.2 of the Royal Decree requires that information to be given in writing where the risks are serious or very serious, and always before work begins. The duty also extends to self-employed workers present at the site (article 24.5).
Duties of the undertaking that owns or runs the workplace. It must give information on the risks specific to the workplace and on emergency measures (article 7) and give instructions to the undertakings present (article 8), in writing where the risks are serious or very serious. Those undertakings are in turn obliged to comply with the instructions and pass them on to their own workers (article 9).
Duties of the principal undertaking. In addition to the above, it must supervise the contractor's health and safety compliance and demand written evidence from it (article 10). This is the block with the greatest consequences, and it is set out in detail below.
Means of coordination. Article 11 lists exchange of information, meetings, instructions, joint specific measures, the presence of prevention resources or the appointment of a person in charge of coordination. It is worth stressing: this is a non-exhaustive list. The rule does not impose a closed catalogue; it requires the choice to be appropriate to the risk. The initiative in establishing them lies with the undertaking that owns the workplace and, failing that, with the principal (article 12.1).
One note that avoids a frequent confusion: the person in charge of coordinating preventive activities under article 13 — the preferred means where two or more of the four conditions listed in that provision coincide — is not the construction health and safety coordinator under Royal Decree 1627/1997. They are distinct figures, with distinct rules and functions.
Owner of the workplace or principal: not the same, and it changes what you must demand
Article 2 of Royal Decree 171/2004 defines both positions, and the difference is not semantic: it determines exactly which documents you can call for.
The undertaking that owns or runs the workplace is the one with the capacity to make the workplace available and to manage it. Its duties are to inform and to instruct.
The principal undertaking is the one that contracts out works or services corresponding to its own line of business (propia actividad) and which are carried out at its own workplace. Its duties additionally include supervising and demanding documentary evidence.
The two features of the principal undertaking are cumulative: its own line of business and its own workplace. If one is missing there is no principal status, although there may still be status as owner of the workplace. You can own the workplace without being the principal, and that is the position of many logistics and industrial sites in relation to a good part of their suppliers.
What counts as "propia actividad" is a fact-specific question, which the courts resolve case by case by reference to the company's production cycle. Contracts such as cleaning, security or catering have been held to fall outside the principal's own line of business in numerous cases, but that cannot be stated as an absolute rule: it depends on the activity of the contracting company. We analyse this boundary in detail in how far the principal undertaking's liability extends.
And one warning that is breached with striking frequency: on construction sites, the first additional provision of Royal Decree 171/2004 displaces the general regime, and the obligations of the principal undertaking fall on the main contractor, not on the developer.
Do you know whether your company acts as owner of the workplace or as principal on each engagement? Let us review your contractual exposure.
The documents the law does require you to demand
The core lies in article 10.2 of Royal Decree 171/2004. As principal undertaking, you must demand in writing and before work begins evidence of two things:
- That the contractor has carried out the risk assessment and the preventive activity planning for the works or services contracted.
- That it has discharged its information and training obligations towards the workers who will be involved.
The chain passes downwards: the contractor must demand the same from its subcontractors in order to be able to hand it to you. And article 10.3 adds a duty of your own: to check that contractors and subcontractors have established the necessary means of coordination between themselves.
Where the work falls within your own line of business, a separate obligation of employment-law origin is added: article 42.1 of the Spanish Workers' Statute requires you to request in writing the clearance certificate on Social Security arrears from the General Treasury of the Social Security (TGSS). The Treasury must issue it within thirty days, with no extension, and once that period has elapsed the requesting employer is released from the joint and several Social Security liability governed by article 42.2.
It is worth saying plainly: there is no "CAE certificate" with legal force. It is a product of the commercial document-management platforms, useful as a management tool, but the rule requires only written evidence with the content just described. A platform showing a contractor in green does not, by itself, evidence compliance with article 10.2.
What the law does not require you to demand, and your contract should
Here lies the blind spot of the whole system. Read article 24 of Law 31/1995 and the whole of Royal Decree 171/2004: the word insurance does not appear. There is no legal obligation to ask for a policy, a certificate of cover or a premium receipt.
The logic of the rule is coherent: it regulates prevention, not financial reparation of damage. But the damage happens. And when it does, the impeccable prevention file in your records does not pay the compensation.
Only the contract specification covers that part. A robust insurance clause in a subcontract usually sets out, as a minimum:
- A liability policy in force, stating the limit per claim and the annual aggregate limit. They are not the same: the aggregate is eroded by every claim in the year and may be exhausted by the time yours arrives.
- An expressly stated employers' liability sub-limit, since that is the section that responds to a claim by the contractor's own injured employee.
- Sections consistent with the work commissioned. Public liability responds to damage arising from the activity, but the Spanish Supreme Court held, in First Chamber judgment 730/2018 of 20 December, that it does not guarantee the correct performance of the contracted service, nor cover damage caused to the item being worked on. If the contractor is going to work on an asset of yours, that exposure is covered by another route and must be called for specifically.
- Cover in force throughout the engagement, with an obligation to evidence renewal at every expiry date and not merely at the outset.
- Prior notification of any cancellation, suspension or non-renewal. This matters more than it appears: under article 15 of the Spanish Insurance Contract Act (Law 50/1980), non-payment of a subsequent premium suspends cover one month after the due date. A contractor can show you a valid certificate in January and be without cover by April.
- The policy's temporal basis, distinguishing whether it operates on an occurrence or a claims-made basis, and with what extended reporting period. In engagements whose damage surfaces late, this is decisive.
On amounts, a deliberate note: we do not publish "recommended" figures, because there is no public source that would support them and because no universal figures exist. Limits are set by reference to the exposure: the value of the asset being worked on, the number of people present at the site, hot work, work at height or in confined spaces, and the cost of interrupting your own operations if the incident stops the line. Not by habit, and not by copying the previous specification.
| Item | What the law requires of you | What your contract should require |
|---|---|---|
| Risk assessment and preventive planning | Yes: article 10.2 of RD 171/2004, in writing and before work begins | The same, updated if the scope of the works changes |
| Evidence of workers' information and training | Yes: article 10.2 of RD 171/2004 | The same, named and updated whenever new personnel join |
| Means of coordination between contractors | Yes: verification, article 10.3 of RD 171/2004 | Express appointment of a point of contact and a meetings regime |
| TGSS clearance certificate on arrears | Yes, where the work falls within your own line of business: article 42.1 of the Workers' Statute | The same, at regular intervals during the engagement |
| Liability policy in force | No | Yes: copy of the specific conditions and paid premium receipt |
| Limit per claim and annual aggregate | No | Yes: minimum amounts sized against the exposure of the engagement |
| Employers' liability sub-limit | No | Yes: expressly stated, not assumed |
| Cover in force throughout the engagement | No | Yes: evidence at each renewal, not only at the outset |
| Advance notice of cancellation or non-renewal | No | Yes: a duty to notify with notice, and a right to suspend the works |
How to read and validate what you are handed is a separate and far from trivial problem: we deal with it in how to validate a contractor's certificate of insurance. And if the person entering your site is self-employed, the analysis changes: we set it out in what liability cover to require from a self-employed subcontractor.
What happens if the contractor has no cover
It is always discovered late, and the order of events is predictable.
First, the administrative penalty. Failing to adopt cooperation and coordination measures is a serious infringement under article 12.13 of the LISOS, and failure by the undertaking that owns the workplace to take steps to ensure that the undertakings present receive adequate information and instructions is one under article 12.14. Both become very serious in activities classified as hazardous by regulation or involving special risks (articles 13.7 and 13.8). Under the amounts in article 40.2 in force since 1 October 2021, following the wording given by Law 10/2021, a serious infringement ranges from 2,451 to 49,180 euros and a very serious one can reach 983,736 euros.
Second, joint and several liability. Article 42.3 of the LISOS provides that the principal undertaking is liable jointly and severally with the contractors and subcontractors referred to in article 24.3 of Law 31/1995, for the duration of the engagement, for the obligations imposed by that Act in relation to the workers they employ at the principal's workplaces, provided that the infringement occurred at the workplace of that principal undertaking. That final clause is a condition, not an ornament.
Third, the civil damages. If the contractor has no policy, or its limit is inadequate, the claim does not disappear: it goes looking for a solvent balance sheet. Your exposure as principal is covered by contractors' and subcontractors' liability, a separate section within your liability policy, with its own sub-limit and its own wording. It is worth checking that it covers your own liability and not merely joint liability.
And fourth, what cannot be passed to anyone. The benefits surcharge under article 164.2 of the Spanish General Social Security Act falls directly on the infringing employer, and that same paragraph renders void as a matter of law any agreement to cover, offset or transfer it. We explain this in why the benefits surcharge cannot be insured.
Your contract specification is, in practice, a policy that you draft yourself. Let us review your insurance clause.
What is actually required varies a good deal by sector: you can see the approach by activity in our solutions by sector, and how we run a review in how we work.
The role of an independent broker
The insurance clause in a contract specification is drafted once and applied for years to dozens of suppliers. If it is badly calibrated — inherited limits, an undeclared employers' sub-limit, no control over renewals — it multiplies the error across the whole contracting chain. If it is well built, it filters out insolvent contractors before they set foot on site.
As an independent brokerage registered with the Spanish DGSFP under reference J0140, we act on the client's mandate: we draft and review the insurance requirements in your contracts, we verify what contractors actually evidence, and we size your own contractors' liability section. We add a point that large accounts tend to overlook: under article 44, second paragraph, of Law 50/1980, the Insurance Contract Act ceases to be mandatory in contracts covering large risks. A company of that size will not be rescued by the law from a badly negotiated wording; only prior negotiation will do it.
Frequently asked questions
What is coordination of business activities? The set of duties that article 24 of Law 31/1995 and Royal Decree 171/2004 impose on undertakings present at the same workplace: cooperation and mutual information, information and instructions from the undertaking that owns the workplace, supervision by the principal over contractors engaged in its own line of business, and the establishment of means of coordination. It also extends to the self-employed.
What documents must I demand from a contractor? The risk assessment and preventive planning for the works or services contracted, and evidence of the information and training given to the workers who will be involved, in writing and before work begins (article 10.2 of RD 171/2004). Where the work falls within your own line of business, also the TGSS clearance certificate on arrears under article 42.1 of the Workers' Statute.
Does the law require me to ask for the insurance policy? No. Neither article 24 of Law 31/1995 nor RD 171/2004 mentions insurance. Requiring a policy, limits, sub-limits and evidence that cover is in force is a contractual obligation: it exists only if you write it into the specification and monitor it throughout the engagement.
What is the difference between the undertaking that owns the workplace and the principal? The owner manages the workplace and must inform and instruct. The principal contracts out works or services within its own line of business carried out at its own workplace and must, in addition, supervise and demand evidence. The principal's two features are cumulative, and you can own the workplace without being the principal.
What penalty applies for failing to coordinate? It is a serious infringement (article 12.13 of the LISOS) and a very serious one in hazardous activities or those involving special risks (article 13.7). Under the amounts in article 40.2 in force since 1 October 2021, the serious band runs from 2,451 to 49,180 euros and the very serious one can reach 983,736 euros.
Sources and legislation
- Law 31/1995 on the Prevention of Occupational Risks, article 24 (coordination of business activities), paragraphs 1, 2, 3 and 5.
- Royal Decree 171/2004, implementing article 24 of Law 31/1995: articles 2 (definitions), 4.2, 7, 8, 9, 10.2, 10.3, 11, 12.1 and 13, and first additional provision.
- Royal Legislative Decree 5/2000, consolidated text of the Act on Infringements and Penalties in the Social Order (LISOS): articles 12.13, 12.14, 13.7, 13.8, 40.2 (amounts as worded by Law 10/2021, applicable since 1 October 2021) and 42.3.
- Royal Legislative Decree 2/2015, consolidated text of the Spanish Workers' Statute, article 42, paragraphs 1 and 2.
- Royal Legislative Decree 8/2015, consolidated text of the General Social Security Act, article 164, paragraph 2.
- Law 50/1980, the Spanish Insurance Contract Act, articles 15 (non-payment of premiums) and 44, second paragraph (large risks).
- Royal Decree 1627/1997, minimum health and safety provisions on construction sites (health and safety coordinator).
- Spanish Supreme Court, First Chamber, judgment 730/2018 of 20 December.
- Annual Report of the Labour and Social Security Inspectorate, 2024.
This information is for guidance only and does not constitute binding advice. Covers, limits and exclusions are governed in every case by the specific terms of each policy. New Brokers Correduría de Seguros, S.L., registered with the DGSFP under reference J0140.
