Employers' liability insurance in Cyprus

With this article, Pitsas Insurances aims to provide its readers with the most essential information about the purpose and features of employers' liability insurance in Cyprus.

In accordance with the Legislation of the Republic of Cyprus, starting from 01.01.1997, all the employers operating in Cyprus are required to conclude an Employer’s Liability Insurance Contract with an authorized licensed insurance agency. It is the employer's responsibility to check whether the insurance agency with which the Insurance Contract is concluded is authorized.

Employers' liability insurance only covers the liability of the insured employer to pay the compensation to the employees (or their families) in connection with the death or personal injury caused by an accident at work or occupational disease resulting from and during their employment.

Who is the employer?

By Law, the employer in Cyprus is any natural or legal person who has an employment relationship with an employee who is responsible for the premises, work organization, working conditions, and equipment (etc.), including the persons who do not have other employees, but conduct economic activities or carry out their business with or without profit.

Employers' liability insurance is equally compulsory for those who hire people to do their housework, shopkeepers, factory owners, hoteliers and other professionals, businessmen or organizations that employ people for more than 8 hours a week. Companies without employees and family businesses with solely family members do not need such insurance.

What is considered an accident and occupational disease?

An accident is any incident that results in the death or personal injury of an employee, provided that it occurs as a result of or in the course of the work of such an employee. Cypriot courts interpret an “accident at work” as the result of a sudden and violent external event leading to the temporary or permanent disability of the employee.

An occupational disease is a disease or disorder identified according to the table annexed to the Social Insurance (Diseases) Regulations 1980, which includes 43 occupational diseases. Here are some of them:

1. Poisoning with lead or other substances.
2. Liming and mesothelioma (a form of cancer that begins in the cells that cover the inner surface of the chest or abdomen).
3. Pneumoconiosis and silicosis (inhalation of dust containing extremely small particles of crystalline silicon that enter the body and destroy the lungs).
4. Lung cancer.

Basic legal requirements for employers

Cyprus employers are required to:

1. Comply with the rules regarding the safety and health of the employees.
2. Keep records of the employees, their duties and gross wages.
3. Review the gross wages of the employees at the end of the insurance period.
4. Have an Insurance Certificate, as it is a mandatory document for the validity of the insurance policy.
5. Place the Insurance Certificate in a conspicuous place in the working area (at the enterprise, in the office, in the house) for the inspection by the Ministry of Labor.
6. Have the company registration number indicated on all insurance-related documents.

The Law obliges the employers to keep records of their employees, their duties and their gross income (gross income includes wages and any other benefits and payments that the employee has - allowances, overtime, etc.).

The amount of the employees' gross income is important information that the employer is obliged to report to the insurer, as it is the basis for calculating the insurance premium. At the end of the insurance period, the employer must submit this information again and, if necessary, make adjustments.

The Employer's Social Security Number is also a required element that must be presented on all the key insurance-related documents. For this reason all employers must know and disclose this number to their insurer.

Legally established limits of the insurance compensation for the employers' liability insurance

The following minimum insurance coverage (indemnity) limits are established by Cyprus Legislation:

1. The limit of insurance coverage for each employee is €160,000.

2. The limit of insurance coverage for each event or series of events is €3,415,000.

3. The total limit of insurance coverage for one insurance period is €5,125,000.

The above compensation limits may not be sufficient to meet the ever-increasing claims and compensations given to the employers as a result of litigation, so insurance companies can, upon request, provide employers with higher insurance coverage of insurance risks so as to be fully prepared for anything that should arise.

The Employers' Liability Insurance Certificate must be located in an accessible place for viewing

Upon receipt or renewal of the Insurance Contract, the insurer issues to the insured employer the Employer’s Liability Insurance Certificate (policy), which must clearly indicate the minimum level of coverage to be provided and the companies covered by the policy. The employee must provide a copy of the Insurance Certificate to their employees for review. Since October 1, 2008, the regulations have also allowed the employers to display the Insurance Certificate electronically. The employers choosing this method should ensure that their employees are familiar with the content of the Certificate and that they know how and where to find the Insurance Certificate and have access to it.

Liability provided for in Cyprus for the violation of the employer’s liability insurance Legislation

Employers' liability insurance is different from civil liability insurance, which covers the liability of individuals and legal entities for the claims brought against them by members of the public or other businesses, but not against claims by employees. Employers' liability insurance is compulsory, while civil liability insurance is generally voluntary.

The employers who do not have insurance are prosecuted under Cyprus Law and may be punished with imprisonment for up to 12 months or a fine of up to 1,500 Euro. Both penalties can be applied to the employers depending on the situation.

Penalties are also stipulated in the event that insurance companies (and not only) provide false or misleading information and/or conceal material details related to the nature of the employer's activities in general and each employee in particular.

Pitsas Insurance concludes Liability Insurance Contracts for its clients - employers with Cypriot and international insurance companies that fully meet all the criteria established by the Legislation of Cyprus.

To calculate the cost of an employer's liability insurance policy for your company, please follow the link.