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In most EU Member States, and also e.g. in Australia, Canada and the USA, accident insurance is a fundamental measure of controlling occupational hazards and their financial consequences as well as reducing the suffering of injured persons. Furthermore, accident insurance is to provide accident victims and their families with means of subsistence. The pioneer accident insurance system, the German Berufsgenossenschaften, was established in 1884. For more than 100 years, the insurance system has evolved and new approaches to accident insurance have been developed in different countries.
Accident injury systems began to emerge in the 19th century due to growing industrialisation and pressure from trade unions. Historically, early development of occupational accident insurance systems may be divided into three phases :
- a period when accident injury compensations was governed by common law. During this period, the chance of an injured worker obtaining actual compensation for an accident at work was almost non-existent.
- a period of employers' liability law, when more specific rules imposing liability upon the employer were introduced and the lack of adequate legal tools where limited by introducing specific rules of employer liability, or at least, weakening the effect of defences used by employers. Such a law was introduced in Germany (1871), Switzerland (1877) and England (1880),
- a period of workers' compensation which began in 1884, when Germany introduced the first compulsory injury compensation scheme that covered all the workers' injuries together with compulsory insurance and compulsory workers' compensation.
Similar regulations were introduced in other countries such as Austria (1887), Norway (1895), and Denmark (1897). Initially in some countries (France, England) the compensation payments were obligatory while employers were given the option to insure against this liability or not.
From that time, legal regulations concerning occupational accident insurance systems were developed. In 1964, the International Labour Office adopted the Employment Injury Benefits Convention, which set out the minimum standards of coverage in respect of benefits for employees to be included and the types of injury for which compensation should be provided. However, only a few countries ratified the Convention (Germany, Belgium, Cyprus, Finland, Ireland, Luxembourg, the Netherlands, Slovenia and Sweden) .
In the European Union prior to 1987 when the Single European Act came into force, there was little European law on occupational health and safety, including occupational insurances. Furthermore, the law on occupational insurances was subject to each country’s own regulations.
National systems vary from country to country, as they were developed independently in different political, social and economic environments. The most fundamental difference is whether the occupational accident insurance system is based on the Bismarckian (contribution based) or Beveridgean (tax financed) model. Most models in Europe (especially in Eastern Europe) are closer to the Bismarckian model, while the UK, Scandinavian countries and some southern countries (Italy, Portugal, Cyprus and Malta) are closer to the Beveridgean one.The specific systems in EU member states differ in scope, organisation structures and forms, legal schemes and financial and payments rules as they have different approaches to welfare state and to workers' compensation
In each Member State, occupational accident insurance covers occupational accidents and diseases including (apart from Denmark and the UK) "commuting" accidents which occur on the way to, and from work. Such accidents and diseases become a subject to insurance when it results in the inability to work, disability or death. Every system makes a clear distinction between occupational accidents and diseases (which, in some countries are reflected by separate insurance schemes). While occupational insurance covers all the occupational accidents, this system only includes specifically defined diseases, and all compensation related to health hazards at work are restricted to these predefined diseases. Usually, diseases are added to such lists when a direct connection between the disease and particular type of work is proven. Each EU country has its own list. Two extreme examples are: Sweden, with their "open system" where each compensation claim for an occupationally caused harm is treated individually, with the list only concerning infectious diseases, and on the other side, France, where the list specifies illnesses with symptoms or requires pathological lesions to be present, the type of work that is known to cause said condition and time constraints for compensation claims .
Common occupational insurance systems based on workers' compensation
insurance vary among EU countries, however, they often include the following two key points  :
- they provide compensation on a no-fault basis. The claimant is not required to prove negligence or breach of legal duty by the employer, while fault on the victim’s own part is usually irrelevant (except in the case of wilful misconduct or self-inflicted injuries), and
- they rarely provide full compensation for injuries as the compensation amount paid usually reflects reasonable economic losses, while non-economic losses (such as pain, suffering, psychical losses) are rarely compensated.
Occupational insurance systems provide the victims with easier access to compensation based on the compulsory insurance systems. However, they also limit their rights to sue the employer for compensation in the case where an accident is deemed the employer's fault or caused by their negligence. Such limitation may be introduced through :
- generous benefits (as it used to be in the Netherlands, with a traditionally generous welfare system, where reducing the social welfare system - especially at beginning of 1990s - together with changes in tort law led to the substantial increase in the use of the tort system
- limitation of the right to claim compensation in cases where there was more than the "ordinary" negligence, including a requirement of proof of intent (Germany) or gross negligence (France, Poland),
- restricting employees' claims to particular types of accidents. In Germany, direct claims are restricted to such cases (with exception for cases of intent) as accidents occurred during travel to, or from work caused by the employer or fellow employee,
- limitation claims against employers by the insurers for compensation recovery with restricting or barring direct claims from employees. In numerous EU countries (Germany and France) most claims against employers are recovery actions brought by the occupational accident insurers,
- defining additional benefits for employees under collective labour agreements: in Sweden, claims against employers are theoretically permitted, but most employees belong to "top-up" schemes, under which they forego the right to sue the employer for higher benefits.
In the UK, however, where regulations concerning employers' liability are highly developed, total direct claim payments made by the employers exceed those paid under a system of compulsory occupational insurance.
Core benefits usually include the cost of medical care and rehabilitation, replacement of lost earnings plus some compensation for permanent injuries and, in fatal cases, funeral costs and benefits for the victim’s family. In some countries (such as Austria, Germany, Belgium, Spain, Finland and Portugal) the occupational accident insurance system bears full responsibility for the cost of health care for victims. In other countries, it rather supplements the health insurance system, covering additional expenses not provided under the public healthcare system.
Organization forms and structures
As a general rule, occupational accident insurance systems in EU countries act as a separate scheme with separate funds and premiums, with some exceptions (the UK, Ireland, the Netherlands) and can be distinguished between public (state-run) and private ones. In some countries, together with compulsory systems, additional voluntary schemes were introduced (e.g. voluntary schemes for the self-employed in Finland, Germany and Spain, or "top-up" schemes in Sweden).
Public systems are present in most EU countries. They are managed by separated public organisations that are established for this purpose only, or by organisations that deal with other social insurances. In the first case, accident insurance is managed by separate, non-profit public institutions that have their own self-financing funds (e.g. Austria, Germany, France, Italy, Spain, Luxembourg). In the latter case, public organisations that manage accident insurances deal with other pillars of the social insurance system, while the accident insurance system itself, still has its own separate funds and premiums (e.g. Sweden, Poland).
Public institutions that run accident insurance systems are usually centralised, however in some countries, the system is decentralised or there are local or regional security branches/agencies (Sweden, France).
In Denmark, Finland, Belgium, United Kingdom, Netherlands and Spain, occupational insurance is run by private commercial institutions that often deal with other insurances as well, with their markets being quite competitive.
In most EU countries, insurance of occupational accidents and diseases is done by a single overall system. Belgium, Spain, Denmark and Portugal have a distinct system for occupational accidents and diseases: disease insurance is a task of the public fund while accident insurance is run mainly by private insurance companies.
As a rule, occupational accident insurance systems are common for all workers; however, there are many exceptions. In some countries there are distinct funds and organisations for different sectors, especially in the public sector (e.g. City of Vienna, Belgium, Germany, Luxembourg), for farmers (e.g. Austria, Poland, Germany), fishermen (Italy), civil service (e.g. Austria, Belgium), and students (Luxembourg).
Germany has a unique sectorial occupational insurance structure. Statutory accident insurance companies from public administration, private and public sectors are the responsible bodies for accident insurance. The statutory accident insurance institutions for the industrial sector, the public sector accident insurers and associations of municipal accident insurers are all represented by a common association. Insurance premiums are in the form of membership fees and vary between sectors, and sometimes even between companies in a specific sector.
Financial and payment rules
Rules for premium
Insurance schemes within occupational accident insurance systems are financed by employers' contributions and the self-employed (if they are insured). In some countries the State is a contributor as well, such as in case of some diseases as in France (e.g. in the case of asbestos caused diseases) or specific branches (e.g. self-employed in agriculture in Germany and Finland).
There are two common alternatives when it comes to paying premiums by employers. It may be settled as a single rate applied to each enterprise based on a specific activity and its risk, or it may vary in accordance with the kind of business and its risk or the number of claims concerning a single employer or specific branch of activity. In the case where single rates are applied to each enterprise, the rates are set by law and based on a percentage of the payroll. The rates may also be changed by the State depending on current policy and budget circumstances (e.g. Sweden reduced the premium from 1.38 to 0.68% of the payroll in 2003 as a result of a budget surplus in the late 1990s). According to Eurogip 2004, the premium levels in Austria, Portugal and Belgium was 1.4 (for accidents at work only), 0.5 and 1.1% of the payroll respectively. In the case where employers' contributions vary according to their business, premium rates may be calculated in different ways. In Denmark they are calculated based on the costs of occupational diseases over the previous three years and the level of employment in each branch of activity. In Germany, in addition to the risk classes that are set according to a specific activity, there is a merit rating that allows for the specific performance of an enterprise in relation to an accident at work to be taken into account.
In addition to direct costs of paid benefits and other costs (such as costs of prevention activities) management costs are taken into account as well. Management costs in insurance organisations exceeded 10% of their total costs in Germany, while in Portugal it amounted to 5% and in France and Belgium - 6% (Eurogip, 2004).
Rules for benefits
In the case of an occupational accident injury resulting in the inability to work, for some countries the employer is required by law or collective agreement to continue to pay to sufferer salary for an initial period, after which the payments are taken over by an occupational insurance system. In Germany, Belgium Austria, Denmark and Luxembourg (in the latter case for permanent employees only) the employer continues to pay the full salary. In Italy and Sweden, part of salary must be maintained. The length of the period can vary from 2 days to several months (e.g. 6 weeks in Germany). After this period, temporary benefits are paid by insurance or health organisations. The benefits are calculated as a percentage of the reference earnings (ranging from 50% in Austria to the total of the ceiling earnings in Luxembourg and Finland). In some countries (Austria, France, Italy, Portugal) benefits may be increased if they are still claimed for a defined period (between 28 days to one year depending on the country). The period for which temporary payments are made is fixed by law in some countries (in Poland it is 6 months with the possibility for an extension to 9 months) or they are continued until recovery or medical stabilisation. In all cases, if the victim has not recovered, they may be eligible for permanent disability benefits.
A victim’s behaviour may be, in some countries, taken into account and influence the compensation level. Intentional acts are often not compensated (except for in Denmark). Gross negligence may also prevent compensation (Spain) or result in a reduction of the benefits (e.g. France, Denmark, Finland, Germany, Luxembourg, Austria).
When calculating permanent benefits, there are two main approaches. In Austria, Belgium, France, Germany and Spain, the calculation is based on compensating victims for their loss of earnings. In practice, the assessment is according to an essentially medical indicative scale that is also meant to take into account the job capabilities and qualification of the claimant. The second approach (Denmark, Finland, Italy, Sweden) allows the victim to receive compensation for both the loss of earnings and, in addition, for the lasting damage to physical or mental integrity; insurance systems also pay compensation separately for psychological harm suffered by the claimant, either for reduced psychical and mental function or as compensation for a reduction in the claimant’s quality of life.
In some countries, to obtain compensation or benefits form occupational insurance systems, it is sufficient to demonstrate that the claimant suffers from a disease that is included on the predefined occupational disease list, and has been exposed to the corresponding risk or job. In some countries, it is necessary to prove that the disease is occupationally caused, and to establish if the disease could have been caused by extra-occupational factors. In Denmark, Portugal, and the UK, extra-occupational factors such as the claimant's medical history may be taken into account and benefits may be assessed as applicable only to the portion of the condition that was caused by work.
Compensation is usually calculated with the use of a disability rate based on either medical or earning disability, or on the loss of earnings. The minimum disability rates vary and some examples are as follows: in Finland it is a 10% loss of earnings capacity and 5% of actual income loss, in Sweden – 6.6% of lost earnings, 20% in Germany and Austria, and 30% in Spain. Having a disability rate, the earnings received previously and a maximum compensation coefficient are taken into account. There may also be other factors: in Austria 20% and 50% is added to compensation if the disability rate exceeds 50% and 70% respectively .
Financial payments are normally in the form of a pension, but a lump sum may be paid if the permanent disability rate is low or moderate as in France and Luxembourg (for a rate lower than 10%), Portugal (30%) and Denmark (50%). In most countries, subject to certain conditions, lump sum payments may be made if requested .
In case of fatal accidents, compensation for surviving spouses/partners is usually calculated based on an injury pension of the deceased and, in some countries, it may be age dependant. It may, as well, depend on the presence of dependent children or a disability of the surviving spouse. For dependent children, benefits are expressed as percentages of the deceased’s reference wage usually paid until the child becomes an adult, but may be extended through their studies or if the dependent has a disability.
Accident prevention is understood as investing in safer and healthier workplaces and may be stimulated mainly by insurance strategies or tax and funding schemes, which are separate from insurance systems. In the first case, such stimulation is usually a part of the occupational accident insurance system.
The most common incentive for accident prevention used in insurance systems in EU countries is a system of premium differentiation based on number/rates of occupational accidents in an enterprise or on the number of claims in the past. Such an insurance premium gradation may be focused on the performance of the economic sector to which the enterprise belongs to or on that of the individual company.
Accident insurance systems in some member States (Belgium, France, Finland) takes into account a company size when calculating insurance premiums. France and Finland both have a different premium system for larger and smaller companies. In France, in the case of larger companies (with more than 200 employees), the premium rate is calculated for each company in an individual way. For smaller companies, drivers are much weaker as the premium rate is based on the results of the entire economic branch.
Some countries introduced the possibility of some flexibility and variability of calculating a premium rate due to prevention activities. The system in the Netherlands allows some flexibility to insurance companies and employers, as specific insurance-related incentives such as premium variations or bonus systems for specific prevention activities occur within the framework of contracts between employers and the private insurers and safety and health services.
In general, organisations running accidents insurance systems also conduct preventive activities including technical supervisory, education, health and safety consciousness and consulting services. In some Member States’ insurance institutions, within their budget coming from collected premium fees, have the means for awards or donations granted for pro-safety activities or good safety indicators, and for subsidising bank loans for OSH investments (e.g. Italy, France). Such activities are held in case of both public and private accident insurance organisations. In some countries, conducting preventive activities is provided by legal regulations (such as in Poland, where up to 1% of the occupational accident insurance fund shall be addressed to such activities) .
In Germany, prevention of occupational accidents is considered to be an essential task of accident insurance companies. The accident insurance companies, as appointed by law to actively support accident prevention, offer various tariffs, but also non-economic incentives to the member enterprises including prevention services, training, consultancy, investigation, funding and inspections. Different sector insurance companies have their own approach to their policy towards economic and non-economic incentives (various premium rates, special awards).
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