In short. Spain's recargo de prestaciones increases an injured worker's benefits by between 30% and 50% where the injury is due to a failure of safety measures. The company pays it from its own funds: article 164.2 of the General Social Security Act forbids insuring it and renders void any agreement to cover it. It is the only expressly uninsurable employer liability in Spanish law.
There is a question that comes up in almost every review of an industrial insurance programme: "and does the policy cover the surcharge?". The answer is no — not because the insurer is unwilling, but because the law prevents it.
It is worth understanding properly, because it shapes how prevention is resourced and how the rest of the cover should be read.
What is the recargo de prestaciones?
Article 164.1 of the Spanish General Social Security Act defines it precisely: all economic benefits arising from an accident at work or occupational disease shall be increased, according to the seriousness of the breach, by between 30% and 50% where the injury is caused by equipment lacking the regulatory safety devices, or by a failure to observe general or specific health and safety measures at work.
Three features set it apart from any other consequence of an accident:
- The company pays it, not Social Security. The mutual insurer pays the ordinary benefit; the surcharge is paid in by the employer declared to be in breach.
- It applies to the benefit, not to the loss. It is not compensation: it is a percentage added to what the worker already receives.
- It reaches every economic benefit arising from that accident, including lifetime ones.
That last point is the one usually underestimated. Where the accident results in permanent disability or in death and survivorship benefits, the surcharge is not a single payment: it attaches to a pension, and the company must pay in the capitalised cost Social Security determines to fund that increase for the whole life of the benefit.
Why can no policy cover it?
Because paragraph 2 of the same article 164 expressly forbids it. Liability for payment 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.
The drafting is deliberately broad: it forbids not only insuring it but also offsetting or transferring it. In other words, an indirect arrangement shifting the cost to a third party does not work either.
The underlying reason is one of legal policy. The surcharge is punitive in nature and preventive in purpose: if it could be insured, it would lose its deterrent effect, because a company could buy in advance the consequence of not investing in safety. By making it uninsurable, the legislator keeps the incentive to prevent with whoever is able to prevent.
For an insurance buyer the consequence is direct: no product exists in the market — domestic or London — that covers the surcharge. If someone offers you one, the agreement would be void.
Would you like to know which part of your workplace-accident exposure is genuinely transferable? Request a review of your programme.
What does the policy cover, then?
This is where paragraph 3 of article 164 changes the conversation. It provides that the liability the article governs is independent of and compatible with liabilities of every kind, including criminal, that may arise from the breach.
In practice, a single accident can open several simultaneous and distinct fronts.
| Front | Who imposes it | Insurable? |
|---|---|---|
| Ordinary benefits | Social Security / mutual | Not applicable |
| Benefits surcharge | INSS, on the Inspectorate's proposal | No |
| Administrative fine | Labour Inspectorate | No |
| Civil damages | Social court | Yes |
| Criminal liability | Criminal courts | Legal defence only |
Of those five fronts, the policy responds to one: the civil damages claimed by the employee or their dependants. It is a distinct concept from the surcharge — it indemnifies proven personal injury rather than increasing a benefit — and it is what the employers' liability section covers within the company's liability policy.
That both liabilities are compatible also means they coexist: the surcharge is not set off against the civil damages, nor the other way round.
How to reduce an exposure that cannot be transferred
When a risk is uninsurable, the only lever is to reduce its likelihood and its impact. With the surcharge, that means working on what triggers it: an established failure of safety measures.
In our experience, four areas weigh most heavily in a surcharge file:
- Preventive documentation consistent with what the business actually does: a current risk assessment, planning, and training specific to the role rather than generic.
- Evidence of issue and use of protective equipment, and of the maintenance of machinery with its regulatory safety devices.
- Documented coordination of business activities where contractors work alongside.
- Traceability: in a surcharge file, what is not documented did not happen.
None of these transfers the risk, but all of them act on the premise the surcharge depends on. And it is worth saying plainly: here the broker is not selling cover, because there is none. What the broker contributes is drawing a precise line between the transferable part of the exposure and the rest, so the company does not discover the difference on the day of the loss.
The surcharge in the subcontracting chain
The question recurs in logistics, industry and construction: if the injured worker belongs to a contractor, can the surcharge fall on the principal?
It can. Being the infringing employer is not determined solely by who appears on the employment contract, but by who breached the preventive obligation. Article 24 of Law 31/1995 and Royal Decree 171/2004 impose coordination duties on concurrent companies and reinforced supervision duties on whoever controls the workplace or contracts out their own core activity.
So in a business with a subcontracting chain, exposure to the surcharge is not limited to its own payroll, and a single accident can bring more than one company into the file.
We analyse your subcontracting chain and how your sections actually fit together. Talk to us.
The role of an independent broker
A broker who tells you they can cover the surcharge is either uninformed or not being straight with you. What they can do, and where the value lies, is to size the insurable part properly: to check that the employers' sub-limit bears some relation to your headcount and claims history, that the contractors' section covers the real exposure of your chain, and that the wording does not introduce exclusions that hollow out the cover.
As an independent brokerage registered with the Spanish DGSFP under reference J0140, we act on the client's mandate with access to the whole market. To place this section within the full picture, types of company liability explains how the covers fit together.
Frequently asked questions
What is the recargo de prestaciones? An increase of between 30% and 50% on all economic benefits arising from an accident at work or occupational disease, where the injury was caused by a failure of safety measures.
Can it be insured? No. Article 164.2 of the Spanish General Social Security Act renders void any agreement or contract to cover, offset or transfer it.
How large can it be in practice? It depends on the percentage set and on which benefits are surcharged. Where there is permanent disability or death and survivorship benefits, it attaches to a pension and the company must pay in the capitalised cost.
If it cannot be insured, what is employers' liability for? For a distinct and compatible liability: the civil damages claimed by the employee, which are insurable.
Can it reach the principal if the injured worker belongs to a subcontractor? It can, where a breach of the coordination and supervision duties under article 24 of Law 31/1995 and Royal Decree 171/2004 is found.
Sources and legislation
- Royal Legislative Decree 8/2015, consolidated text of the General Social Security Act, article 164, paragraphs 1, 2 and 3.
- Law 31/1995 on the Prevention of Occupational Risks, articles 14 and 24.
- Royal Decree 171/2004, implementing article 24 of Law 31/1995.
- Law 36/2011 governing the social jurisdiction, article 2(b).
This information is for guidance only and does not constitute binding or legal 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.
