Quick Overview
- Insurance coverage begins by law on the date the first employment relationship is established.
- No insurance contract is signed, but the employer must register with the appropriate insurance company.
- The insurance covers compensation for work-related injuries and occupational diseases.
- Premiums are typically paid quarterly.
- The amount of the premium depends on the employees’ wage bases and the rate corresponding to the employer’s primary business activity.
- If the employer fails to fulfill its obligations, the insurance company may demand that the employer repay a portion of the money paid out.
Are you unsure whether you’re with the right insurance company, whether you’re calculating premiums correctly, or how to proceed in the event of a work-related injury? A lawyer can help you review your documentation and communications with the insurance company before a dispute arises.
What is statutory employer liability insurance?
Statutory employer liability insurance is mandatory insurance designed to protect employees in the event of a work-related injury or occupational disease. If such a situation occurs, the employer is legally obligated to compensate the employee. This compensation is then paid by the insurance company with which the employer has taken out statutory insurance.
In other words, it is insurance for the employer that covers their statutory liability for damages incurred by an employee while performing their work.
Why is employer’s liability insurance mandatory?
The purpose of this insurance is to protect employees who suffer harm at work and, at the same time, to relieve the employer of sudden high expenses when they must pay employees for harm and damages. The law defines the employer’s liability as strict liability, meaning it is independent of fault—the employee is automatically entitled to compensation if the injury or illness occurred in direct connection with work.
The obligation to obtain statutory employer liability insurance is established by the Labor Code and the Decree on Statutory Liability Insurance for Damages Resulting from Work-Related Accidents or Occupational Diseases.
Are you solving a similar problem?
Do you need advice on labor law?
Contact the Dostupný advokát team—we’ll draft contracts for you and help with insurance claims and disputes with employees. Quickly, clearly, and even online.
I need help
- When you order, you know what you will get and how much it will cost.
- We handle everything online or in person at one of our 6 offices.
- We handle 8 out of 10 requests within 2 working days.
- We have specialists for every field of law.
Who is covered by statutory insurance?
Statutory insurance applies to employers who employ at least one employee under an employment relationship. It therefore applies not only to traditional employment relationships but generally also to employees working under a contract for work (DPP) or a contract for specific work (DPČ).
Coverage begins automatically on the date the first employment relationship is established, and the employer does not need to enter into an insurance contract. However, the employer must notify the relevant insurance company of this fact without undue delay and provide their identification information.
A self-employed person who does not employ anyone does not pay insurance premiums. However, as soon as they begin employing even one person, they may become subject to this obligation.
Who administers the insurance?
Statutory employer liability insurance in the Czech Republic is administered by Kooperativa pojišťovna and Generali Česká pojišťovna. Employers cannot choose freely between them.
Generali Česká pojišťovna primarily insures employers who already held this insurance with its legal predecessor as of December 31, 1992, and their legal successors. Other employers are insured by Kooperativa.
The employer’s primary business activity does not determine which of these insurance companies will provide coverage. However, it is important for determining the premium rate.
What does the insurance cover?
Statutory insurance covers all cases involving:
- an occupational accident (e.g., a fall from a ladder, an electric shock, a cut from a machine),
- an occupational disease (e.g., dust-induced asthma, eczema, hearing loss from excessive noise).
The insurance company then reimburses the employer for the costs that must be paid to the employee, such as:
- compensation for pain and suffering (based on tables and medical evaluations),
- medical expenses (medications, hospitalization, rehabilitation),
- lost wages during the period of incapacity for work,
- a disability pension —compensation for loss of earnings after the end of the period of incapacity for work,
- funeral expenses and support for survivors, if the employee dies.
Effective June 1, 2025, the insurance also includes a one-time payment upon termination of employment if the employee has permanently lost the medical ability to perform their current job due to a work-related injury, an occupational disease, or a risk of an occupational disease, and the employment relationship was terminated for this reason by the employer’s notice or by mutual agreement.
How does compensation under statutory insurance work?
If an accident occurs, the employer first compensates the employee and then files a claim for reimbursement with its insurance company.
In order for the insurance company to approve a claim under statutory employer liability insurance, the employer must submit several essential documents. The foundation is a properly completed accident report, which is filed on the prescribed form and contains all key information about when, where, and how the work-related accident occurred.
Other essential supporting documents include medical reports and evaluations that document the extent of the employee’s injuries, the course of treatment, and, if applicable, the duration of the employee’s inability to work.
To calculate compensation for lost wages, pay stubs must also be provided, from which the insurance company determines the employee’s usual wage prior to the accident.
In some cases, the accident investigation report may also be decisive, particularly in the event of a more serious injury or if the circumstances of the accident are not entirely clear. This report is prepared by the employer, often in cooperation with the labor inspectorate.
Complete and properly documented evidence will significantly speed up the process of claim approval and payment.
Benefits are generally paid in full unless the employer has violated the law (e.g., occupational safety and health regulations). However, if there has been a gross violation of regulations, the insurance company may deny benefits and seek reimbursement (known as “recourse”).
A missing accident report, incomplete medical records, or incorrectly calculated compensation can significantly complicate the processing of an insurance claim. We will help you review the documentation and prepare the necessary materials for the insurance company.
From the Practice of Dostupný advokát
In practice, the problem is often not the existence of insurance itself, but incomplete documentation of a workplace accident. For example, an employer may record the incident in the accident log but fail to document witness statements, the condition of the workplace, or the employee’s prior training.
If a dispute later arises regarding the circumstances of the accident or a violation of occupational safety and health regulations, the missing evidence is difficult to replace. We therefore recommend not waiting for a request from the insurance company and recording all the circumstances of the accident immediately after the incident.
How much does statutory insurance cost, and how is it paid?
The amount of the premium depends on two basic factors: the total of employees’ assessment bases and the rate determined according to the employer’s primary activity. Higher-risk operations therefore generally pay higher premiums than administrative or other lower-risk activities.
Premiums are typically paid quarterly:
- by January 31 for the first quarter,
- for the second quarter by April 30,
- for the third quarter by July 31,
- for the fourth quarter by October 31.
The employer calculates the premiums themselves. They must also be able to provide proof that they have paid the correct amount of premiums for the entire duration of the insurance coverage.
Can the insurance company refuse to pay?
The insurance company may refuse to pay benefits in cases where the employer fails to fulfill its legal obligations. Typically, this involves situations where the employer fails to maintain proper documentation regarding a work-related injury —for example, there is no record of the injury, medical reports are not provided, or an investigation into the causes of the accident is not conducted.
A claim may also be denied if it turns out that the injury did not occur in direct connection with the performance of work. For example, if an employee breaks a leg during a lunch break away from the workplace, it may not be considered a work-related injury, and the insurance company will therefore refuse to pay the claim.
Another reason for denial may be a gross violation of occupational safety and health (OSH) regulations by the employer. For example, if an employer fails to train an employee to operate dangerous machinery and an injury subsequently occurs, the employer bears responsibility for this error.
In such cases, the insurance company has the right to seek reimbursement for the compensation paid from the employer through what is known as a “recourse proceeding.” The employer must then cover the damages from its own funds.
Our attorney recommends: If an insurance company has denied your claim, don’t wait— contact us. Every case is unique, and a denial may not be final.
Tip for article
Tip: Not sure when and how you can withdraw from an employment contract? In our article, you’ll learn under what conditions this is possible, how it differs from termination, and what steps you need to take to ensure your withdrawal is valid.
Consider commercial insurance as well
Statutory insurance covers only employees’ work-related injuries and occupational diseases. It does not cover damages that employees might cause to third parties, to property, or as a result of professional negligence. Therefore, you should also consider commercial employer liability insurance, which covers these situations as well. If an employee accidentally damages a customer’s property, statutory insurance will not help you. Commercial insurance, however, will.
The amount of the premium is based on two key factors: the total of employees’ assessment bases and the rate determined according to the employer’s primary business activity. Consequently, higher-risk operations generally pay higher premiums than administrative or other lower-risk activities.
Premiums are typically paid quarterly:
- by January 31 for the first quarter,
- for the second quarter by April 30,
- for the third quarter by July 31,
- for the fourth quarter by October 31.
The employer calculates the premiums themselves. They must also be able to provide proof that they have paid the correct amount of premiums for the entire duration of the insurance coverage.
NEW SECTION: “WHEN CAN THE INSURANCE COMPANY REDUCE PAYMENTS OR SEEK RECOVERY?”
The insurance company is not always required to bear the final costs of an insured event. If the employer breaches its obligations, the insurance company may assert a claim against the employer for reimbursement of part or all of the benefits paid.
Recourse may be sought in particular if:
- the damage was caused by intentional conduct,
- the damage was caused under the influence of alcohol or another intoxicating substance,
- the damage was caused by a particularly serious violation of occupational safety and health regulations,
- the employer was conducting the activity in question without authorization,
- the employer was in arrears with insurance premium payments,
- the employer failed to provide the necessary cooperation to the insurance company,
- the employer, without the insurer’s consent, acknowledged a time-barred claim or entered into a court settlement.
Not every administrative error automatically leads to a complete denial of coverage. It depends on the nature of the violation, its impact on the occurrence of the damage, and whether it made it more difficult for the insurance company to assess the claim.
Is the insurance company demanding that you repay the benefits paid or claiming that you violated occupational safety and health regulations? First, have it verified whether its demand is supported by law and whether it corresponds to the circumstances of the case.
CTA: Review the insurance company’s procedure
REVISED CHECKLIST FOR EMPLOYERS
What Employers Should Check Regularly
To reduce the risk of problems in the event of an insured incident, regularly check:
- whether you are registered with the appropriate insurance company,
- whether you are using the correct premium rate,
- whether you are paying premiums on time,
- whether you maintain up-to-date occupational safety and health documentation,
- whether you keep records of employee training,
- whether you document the distribution of protective equipment,
- whether you maintain an accident log,
- whether you properly investigate and report workplace accidents,
- whether you communicate with the insurance company before acknowledging a disputed claim.
Well-maintained documentation won’t prevent every workplace accident, but it can significantly influence whether an employer can demonstrate compliance with its obligations.
Summary
Statutory employer liability insurance arises directly from the law as soon as an employer establishes the first employment relationship. No insurance contract is concluded, but the employer must notify the relevant insurance company of the commencement of coverage. The insurance covers statutory compensation for workplace accidents and occupational diseases, including compensation for lost wages, pain and suffering, medical expenses, claims by survivors, and, under specified conditions, a lump-sum payment upon termination of employment. Insurance premiums are paid quarterly, and the amount depends on the wage base and the employer’s primary business activity. In the event of non-payment of premiums, a serious violation of occupational safety and health regulations, or failure to provide the necessary cooperation, the insurance company may seek recourse against the employer.
Frequently Asked Questions
Does an employer with a single employee working under a DPP contract also have to pay for insurance?
Yes. Statutory insurance generally also applies to employers who hire a single person under a contract for work or a contract for services.
Is an employer required to take out an insurance policy?
No. Insurance coverage arises directly by law. However, the employer must notify the relevant insurance company of the establishment of the first employment relationship.
How can an employer find out which insurance company provides coverage for them?
Newly established employers are generally insured with Kooperativa. Employers who are continuing insurance policies that were already in effect as of December 31, 1992, remain with Generali Česká pojišťovna.
When is the employer's statutory insurance due?
Insurance premiums are typically paid four times a year, by January 31, April 30, July 31, and October 31.
What is the minimum premium?
The minimum insurance premium is 100 Kč per calendar quarter, even if the calculation based on the wage bases and the applicable rate results in a lower amount.
