Workers’ Compensation Insurance – Your Legal Obligation as an Employer
As an employer in Denmark, you are required by law to take out workers’ compensation insurance for your employees. This applies regardless of whether employees are full-time, part-time, unpaid, temporary, or working only a few hours per week.
What Does Workers’ Compensation Insurance Cover?
The insurance provides coverage if an employee is injured while performing work duties.
An accident is defined as a physical or psychological injury that occurs suddenly - or as a result of an event or exposure taking place within five days.
Examples include:
- A fall or an incorrect lift
- A sudden strain
- A traumatic experience
Who Must Be Covered?
- All employees, regardless of employment type
- Family members, if their work corresponds to that of other employees
- CEO´s of limited liability companies (ApS and A/S), as well as active shareholders and partners
If family members work in the company but not under the same conditions as other employees, you may choose to take out voluntary workers’ compensation insurance.
The same applies to directors of sole proprietorships.
What Does Workers’ Compensation Insurance Provide?
Workers’ compensation insurance offers financial protection if an employee is injured in connection with work.
Here is an overview of what the insurance typically covers:
- ✅ Compensation for Loss of Earning Capacity
If a work-related injury reduces an employee’s ability to work and earn income, compensation may be granted.
Compensation is provided for a permanent loss of earning capacity of 15% or more, in accordance with the Danish Workers’ Compensation Act. - ✅ Compensation for Permanent Injury (Disability Award)
For lasting physical or psychological consequences of a work injury, a tax-free compensation may be granted.
You are entitled to compensation if the degree of disability is 5% or higher. - ✅ Death Resulting from a Work Injury
If an employee dies as a result of a work-related injury, the insurance covers:
– Compensation for loss of provider
– Possible special compensation to the surviving dependents - ✅ Coverage of Treatment Expenses
The insurance covers necessary treatment costs related to the injury — such as physiotherapy or other relevant treatment. - ✅ Damage to Glasses or Contact Lenses
If an employee’s glasses or contact lenses are damaged at work, repair or replacement is covered. - ✅ Immediate Crisis Assistance
In the event of traumatic experiences such as robbery, assault, threats, accidents, or break-ins, both business owners and employees have access to psychological crisis support.