Civil Liability Coverage for Labor Accidents and Occupational Diseases

The purpose of this civil liability coverage –which is not mandatory– is covering liability for death or personal injuries of employees for the contingencies derived from labor accidents and occupational diseases set forth in section 6 of Law 24,557, when the employer is liable on the basis of civil law principles and in excess of coverage granted by Occupational Hazards Insurers (Aseguradoras de Riesgos del Trabajo).

The Argentine Superintendence of Insurance (ASI) seeks to grant protection against the right of employees to collect compensations both from their employers and from Occupational Hazards Insurers. In this regard and on several occasions, the Supreme Court of Justice has found against the constitutional validity of section 39 of the Occupational Hazards Law, inasmuch as it limits the right of employees to claim against their employers, and has entitled employees to claim compensation based on civil law principles against their employers in addition to those granted by Occupational Hazards Insurers (Aseguradoras de Riesgos del Trabajo).

In order to underwrite this new civil liability coverage, insurers –among other requirements– must be authorized by the ASI to underwrite general “Civil Liability” insurance and have a minimum capital of AR$ 3,000,000, which will be additional to that required to underwrite general “Civil Liability” insurance.

It is a condition of this new coverage that the employer also maintains Occupational Hazards insurance and that the name and other information on each employee are declared to the civil liability insurer. Among other exclusions, occupational diseases shall be excluded, even if they become apparent while the civil liability policy is in force, when they originate from a cause existing before the inception of the policy, unless when they were reported to the insurer when the civil liability policy was taken out.

The insured employer will participate in each loss with a deductible not lower than 5% of the insurance monies agreed or ascertained by judicial or administrative authorities, with a minimum of 1% and a maximum of 5% of the sum insured. This deductible will be increase to twice the basic deductible if the accident or disease is produced as a result of a breach of hygiene and safety at work rules.

Civil liability insurers will be in charge of paying court expenses in civil proceedings and the out-of-court expenses necessary to repeal the claims. The amount of this ancillary obligation will not exceed the lower of the following amounts:

1. 30% of the sums due by insurers for the actual loss;
2. 30% of the sum insured.

The sum insured for each employee to be underwritten by civil liability insurers will be established in an amount ranging from AR$ 250.000 to AR$ 1.000.000.