Dr. Adriano Bastiani, Dr. Héctor Upegui-García

The state in retreat

Unlike occupational disability insurance, workers' compensation insurance is legally compulsory. In other words, employers have to provide workers' compensation coverage for their staff. However, given the changes in working conditions, life expectancy and causes of disease, many state systems have not been able to keep pace with developments in workers' compensation, which has led to an increasingly important role for the private insurance industry.

Workers' compensation insurance protects employees and their families against the consequences of occupational accidents and diseases. The make-up of any particular workers' compensation system primarily depends on the economic, social and political parameters in place. However, there are many features common to almost all systems: workers' compensation insurance is compulsory, its benefits are paid regardless of fault and it is subject to strict legal regulations and supervisory controls. Even if there is no international standard definition of occupational accidents and diseases, most systems incorporate the following criteria:

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  Occupational accidents occur in connection with occupational activity during working hours. They are sudden and accidental occurrences and cause some sort of physical injury.
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  Occupational diseases result from continuous harmful exposure to an occupational hazard. This exposure must, in terms of its duration and dosage, be conducive to triggering an occupational disease and the disease must be medically diagnosed.

International comparison

In many countries, the private insurance sector is involved in the cover ofoccupational accidents and diseases. Norway (1991) and Colombia (1994) have only recently opened up their systems to private insurers and several Eastern European countries are looking to do the same. By contrast, countries such as Portugal and Belgium can look back on a long tradition of private insurance participation in workers' compensation. The country with the longest experience of private insurance in this field is the USA. However, it is very difficult to draw meaningful comparisons, as very little is regulated at national level and the individual states have pretty much a free hand in developing their own models. These models usually reflect the very different traditions and principles of the states and range from very liberal to heavily regulated.