In short. Employers' liability covers what Social Security does not indemnify: the gap between fixed statutory benefits and the personal injury actually proven by an injured employee. It is a section within the general liability policy, almost always carrying a sub-limit below the main limit — and that sub-limit, not the main limit, is the company's real exposure. It does not cover the benefits surcharge, which Spanish law declares uninsurable.
In 2025 Spain recorded 529,838 workplace accidents with sick leave during working hours, according to the advance figures of the Workplace Accident Statistics published by the Ministry of Labour and Social Economy. The vast majority are resolved with a period of leave and the corresponding benefits. A small fraction ends up before a social court, with the employee claiming from their employer compensation that Social Security has not paid.
That small fraction is the one that ruins a financial year. And it is precisely the territory of employers' liability.
What is employers' liability cover?
It is the section that responds to claims brought by an employee against their own company for damage suffered in an accident at work or through occupational disease. It also responds to claims brought by their dependants in the event of death.
One point is worth fixing from the outset: employers' liability is not a standalone policy. It is a section bought within the company's liability policy, alongside public liability, tenant's legal liability or products liability. It shares their wording but carries its own sub-limit.
Its foundation lies in articles 1902 and 1903 of the Spanish Civil Code — whoever causes damage through fault or negligence must make it good, including for the acts of those they are answerable for — and in the duty of protection under article 14 of Law 31/1995 on the Prevention of Occupational Risks. Jurisdiction over these claims sits with the social courts, under article 2(b) of Law 36/2011.
What exactly does it cover?
It covers the civil damages the company must pay the employee, together with legal defence costs and any court bonds required of it in the proceedings.
The heads of loss that typically make up those damages are the ones Social Security does not address:
- Non-pecuniary damage for the sequelae and for the period of recovery.
- Cosmetic harm, where the injury causes it.
- Actual loss of earnings, where the shortfall exceeds what the benefits compensate.
- The separate loss suffered by family members in cases of death or catastrophic disability.
In practice, the social courts apply the Spanish motor injury scale as an indicative reference, with the adjustments proper to workplace accidents. The cover actually granted is, in every case, governed by the specific terms of each policy.
Do you know the employers' liability sub-limit on your current policy? Request a review of your programme.
The boundary with Social Security benefits
This is where the most widespread misunderstanding sits, and what leads many companies to conclude they do not need the section.
When there is an accident at work, Social Security pays fixed benefits: temporary incapacity allowance, permanent disability pension, death and survivorship benefits. All are calculated on contribution bases using set formulas. They are objective benefits: they are paid whether or not the company was at fault.
What they do not do is indemnify the full personal injury. A 34-year-old operative who loses movement in one hand will receive their disability benefit; the non-pecuniary damage, the cosmetic harm and the portion of lost earnings the pension does not cover remain uncompensated. That gap is what can be claimed from the company, and to claim it the employee must establish a breach of health and safety obligations.
Head of loss by head of loss, the split looks like this:
| Head of loss | Paid by Social Security? | Covered by employers' liability? |
|---|---|---|
| Temporary incapacity allowance | Yes, on contribution bases | No |
| Permanent disability pension | Yes, on contribution bases | No |
| Non-pecuniary damage for sequelae | No | Yes |
| Cosmetic harm | No | Yes |
| Uncompensated loss of earnings | No | Yes |
| Family members' separate loss | No | Yes |
| Benefits surcharge | No: paid by the company | No: uninsurable by law |
| Labour Inspectorate fine | No | No |
Hence the real sequence after a serious accident involving negligence: Social Security benefits, plus the benefits surcharge, plus an administrative fine from the Labour Inspectorate, plus civil damages and, in the most serious cases, criminal liability. Of those five fronts, the policy responds to one: the civil damages.
What it does not cover: the benefits surcharge
This is the exclusion that surprises most, and it admits of no nuance or wording negotiation.
Article 164.1 of the Spanish General Social Security Act provides that, where the injury is caused by a failure of safety measures, the economic benefits are increased by between 30% and 50% depending on the seriousness of the breach. Article 164.2 then provides that this liability falls directly on the infringing employer and may not be the subject of any insurance, any agreement or contract to cover, offset or transfer it being void as a matter of law.
It is not a policy exclusion that can be bought back: it is a statutory nullity. We deal with it in detail in why the benefits surcharge cannot be insured.
Paragraph 3 of the same article adds the nuance that does work in the company's favour: that liability is independent of and compatible with liabilities of every kind. Precisely because they are distinct liabilities, employers' liability can respond to the civil damages even though the surcharge falls outside.
Alongside the surcharge, administrative penalties, fines and personal criminal liability also sit outside the section.
Why the employers' sub-limit is the number that matters
A liability policy states a main limit and, beneath it, sub-limits by section. Employers' liability almost always carries one, and it usually sits below the main limit.
In a standard structure, a main limit of €300,000 may sit alongside an employers' liability sub-limit of €150,000. If the company faces a claim from an employee, the figure protecting it is not the first but the second. The main limit, in that claim, is an irrelevant number.
It is the most common sizing error we find when reviewing programmes: companies with a generous main limit, bought with proper judgement, and an employers' sub-limit inherited from the original policy that was never revisited while headcount multiplied.
We analyse your real exposure before approaching the market. Talk to us.
Who answers when the injured worker belongs to a subcontractor
This is the technical confusion that costs most, because it points at the wrong section.
If the injured person is not your employee but a contractor's, the employers' liability section does not respond: it covers your workforce. What may be triggered is contractors' and subcontractors' liability, a separate section with its own sub-limit and its own wording.
And the exposure is real. Article 24 of Law 31/1995 and Royal Decree 171/2004 impose duties of coordination and supervision on the company that controls the workplace and on anyone contracting out their own core activity. Breach of those duties is the standard argument for extending liability to the principal.
So in a business with a subcontracting chain, reviewing only the employers' sub-limit leaves half the risk unexamined. Both need reviewing, together with a check that the contractors' wording covers your own liability and not merely joint liability.
The role of an independent broker
Two policies with the same premium and the same main limit can leave very different employers' exposures, depending on where the sub-limit sits and how the section is worded. As an independent brokerage registered with the Spanish DGSFP under reference J0140, we act on the client's mandate: we compare wordings across the whole market, we negotiate the wording and not only the price, and when a claim arises we represent the company before the insurer.
To place employers' liability within the full picture, types of company liability explains how it fits with the other covers.
Frequently asked questions
What is employers' liability cover? The section that responds to claims brought by an employee —or their dependants— against their own company for damage suffered in an accident at work, over and above Social Security benefits.
Isn't the accident already covered by Social Security? Social Security pays fixed benefits calculated on contribution bases. They do not indemnify the full personal injury: non-pecuniary damage, cosmetic harm and actual loss of earnings are not covered.
Does it cover the benefits surcharge? No. Article 164.2 of the Spanish General Social Security Act places it directly on the infringing employer and renders void any agreement to insure it.
What sub-limit should we buy? It depends on headcount, the hazard of the activity and the awards the social courts are making in your sector. Being lower than the main limit, it defines the real exposure.
Are we liable if the injured worker belongs to a subcontractor? You may be, but not through the employers' section — through contractors' and subcontractors' liability, which is separate and carries its own sub-limit.
Sources and legislation
- Royal Legislative Decree 8/2015, consolidated text of the General Social Security Act, article 164 (surcharge on economic benefits).
- Law 31/1995 on the Prevention of Occupational Risks, articles 14 (duty of protection) and 24 (coordination of business activities).
- Royal Decree 171/2004, implementing article 24 of Law 31/1995.
- Spanish Civil Code, articles 1902 and 1903.
- Law 36/2011 governing the social jurisdiction, article 2(b).
- Ministry of Labour and Social Economy, Workplace Accident Statistics, January–December 2025 advance release.
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.
