Understanding the nuances of Worker’s Compensation Insurance is crucial for both employers and employees. This article aims to demystify the mandatory nature of this insurance and elucidate how the Workers Compensation policy functions in Costa Rica.
The Mandate of Worker's Compensation Insurance
Under Costa Rican law, specifically Law 6727 on occupational risks, Worker’s Compensation Insurance is more than just a legal formality—it’s a fundamental right for employees and a critical responsibility for employers. This law unequivocally states that insurance against occupational risks in all labor activities is not only mandatory but also universal and compulsory.
An employer who does not insure workers will be responsible to them and the insurance entity, for all medical-sanitary, rehabilitation, and monetary benefits that said insurance entity has granted.
How Does Workers Compensation Policy Work?
Scope of Coverage: The policy covers all forms of occupational risks. This includes accidents and illnesses that occur as a direct consequence of work-related activities, regardless of the location where these activities are performed.
Employer’s Obligation: It’s the employer’s duty to ensure that all employees are covered by this insurance. Failing to do so, the employer becomes personally liable for any benefits that the insurance would typically cover.
Beyond the Workplace: Contrary to popular belief, the coverage is not confined to the physical boundaries of the workplace. If an employee is performing work-related duties outside their regular workplace, they are still covered.
Exceptions to Coverage: The policy does not cover incidents that occur during personal detours or activities unrelated to work. Also, incidents resulting from intentional acts or under the influence of substances are not covered.
Benefits Included: The policy encompasses a broad spectrum of benefits, such as medical, surgical, hospital, pharmaceutical, and rehabilitation assistance, along with necessary medical devices and monetary benefits for adaptation, relocation, and rehabilitation.
Claim Process: In case of an occupational accident or illness, employees are required to report the incident to their employer, who then files a claim with the insurance provider.
Importance of Compliance: Employers must not only insure their employees but also keep accurate records and comply with reporting requirements. Negligence in these areas can lead to significant legal and financial repercussions.
The Impact on Employees and Employers
For employees, this insurance provides a safety net, ensuring that they are protected against the financial implications of work-related injuries or illnesses. For employers, it not only protects their workforce but also safeguards the business against potential lawsuits and financial losses arising from workplace accidents.
The Workers Compensation Policy of the I.N.S.
Although the insurance market was deregulated to date there is only one provider of Workers Compensation Insurance and that is the government owned National Insurance Institute offers this insurance in the country.
As we pointed out above, it is the responsibility of the employer to properly register the worker in this insurance.
The INS offers employers the RT (Riesgos del Trabajo) Virtual online platform, where they can carry out various insurance management tasks such as: submitting payroll, provisional inclusion of employees, accident notifications, and other.
Every month, the worker receives their insurance certificate, which allows them to validate their policy, as well as provides relevant insurance information.