Definition and Features of Industrial Accident Compensation Insurance
Definition of Industrial Accident Compensation Insurance
- Industrial Accident Compensation Insurance refers to a social insurance (hereinafter referred to as "industrial accident insurance") to compensate workers promptly and fairly for any occupational accident through the industrial accident compensation insurance business, to establish and operate insurance facilities necessary to facilitate the rehabilitation of workers suffering from occupational accidents and their return to society, and to carry out accident prevention projects and workers' welfare projects, etc. (Article 1 of the Industrial Accident Compensation Insurance Act).
Features of industrial accident insurance
- The industrial accident compensation insurance benefits (hereinafter referred to as “Insurance Benefits”) are paid to workers regardless of the negligent conduct. Insurance benefits provide a higher coverage than other private insurances, such as accident insurance, and support various rehabilitation services, including pensions for persons with disabilities and bereaved families and additional medical treatment (Source: See p. 2 of the “2023 Manual of the Subscription and Payment of the Industrial Accident Compensation Insurance and Employment Insurance”, Korea Workers' Compensation & Welfare Service).
※ However, workers suffering from civil occupational accidents may receive compensation for damages only when such accidents were caused by any intentional or negligent conduct by the employer (Articles 750 and 751 of the Civil Act).
- If a worker suffering from an occupational accident has received or may receive any insurance benefit pursuant to the Industrial Accident Compensation Insurance Act, the policyholder shall be exempted from liability for accident compensation, as prescribed by the Labor Standards Act for the same cause (Article 80 (1) of the Industrial Accident Compensation Insurance Act).
- In principle, an employer shall pay all the industrial accident compensation insurance premiums (Article 13 (1) of the Act on the Collection, etc. of Premiums for Employment Insurance and Industrial Accident Compensation Insurance).
※ An employer and a worker shall pay half of the employment insurance premiums pursuant to the Employment Insurance Act each, respectively (Article 13 (2) of the Act on the Collection, etc. of Premiums for Employment Insurance and Industrial Accident Compensation Insurance).
- The amount of insurance benefits does not cover all the damages of an occupational accident but corresponds to the amount calculated based on the average wage (Article 36 (3) through (8) of the Industrial Accident Compensation Insurance Act).
Scope of Application of Industrial Accident Compensation Insurance Act
Scope of application
- The Industrial Accident Compensation Insurance Act shall apply to every business or workplace that employs workers (hereinafter referred to as "business") (Main sentence of Article 6 of the Industrial Accident Compensation Insurance Act).
Exceptions
- The Industrial Accident Compensation Insurance Act shall not apply to businesses eligible for cover under an accident compensation scheme pursuant to the Public Officials Compensation Act, the Military Pension Act, the Seafarers’ Act, the Act on Accident Compensation Insurance for Fishing Vessels and Their Crew Members or the Pension for Private School Teachers and Staff Act (Proviso to Article 6 of the Industrial Accident Compensation Insurance Act and Article 2 (1) of the Enforcement Decree of the Industrial Accident Compensation Insurance Act).
※ If a worker of a business not applied with the Industrial Accident Compensation Insurance Act but eligible for cover under an accident compensation scheme pursuant to the Public Officials Compensation Act, etc., suffers an accident, they shall receive compensation for damages in accordance with the Public Officials Compensation Act, the Military Pension Act, the Seafarers’ Act, the Act on Accident Compensation Insurance for Fishing Vessels and Their Crew Members or the Pension for Private School Teachers and Staff Act.
- In addition, the Industrial Accident Compensation Insurance Act shall not apply to employment activities within households, and agricultural, forestry (excluding logging industry), fishery or hunting businesses with less than 5 regular workers (Proviso to Article 6 of the Industrial Accident Compensation Insurance Act and Article 2(1) of the Enforcement Decree of the Industrial Accident Compensation Insurance Act).
※ If a worker of a business not applied with the Industrial Accident Compensation Insurance Act suffers an occupational accident (except businesses that have voluntarily purchased the industrial accident insurance policy among businesses excluded from the application of the Industrial Accident Compensation Insurance Act), they shall receive compensation for damages in accordance with Articles 78 through 92 of the Labor Standards Act.
Purchase of Industrial Accident Insurance
Policyholders of industrial accident insurance (business owners)
- Compulsory joining
· The owner of a business applied with the Industrial Accident Compensation Insurance Act shall become a policyholder of the industrial accident (Article 5 (3) of the Act on the Collection, etc. of Premiums for Employment Insurance and Industrial Accident Compensation Insurance).
- Voluntary joining
· The owner of a business not applied with the Industrial Accident Compensation Insurance Act may purchase the industrial accident insurance policy with the approval of the Korea Workers' Compensation & Welfare Service (Article 5 (4) of the Act on the Collection, etc. of Premiums for Employment Insurance and Industrial Accident Compensation Insurance).
- Fictitious joining
· If a business whose owner is compulsorily covered by the industrial accident compensation insurance comes to fall within the scope of businesses excluded from application of the Industrial Accident Compensation Insurance Act due to reasons such as a change in business size, etc., the business owner shall be deemed to voluntarily hold the industrial accident insurance from the date of coming to fall thereunder (Article 6 (2) of the Act on the Collection, etc. of Premiums for Employment Insurance and Industrial Accident Compensation Insurance).
· If the owner of a business which has compulsorily or voluntarily purchased the insurance policy ceases to employ a worker during the operation of the business, the business owner shall be deemed to hold the industrial accident insurance policy even for a non-employment period not exceeding one year from the 1st day of unemployment (Article 6 (3) of the Act on the Collection, etc. of Premiums for Employment Insurance and Industrial Accident Compensation Insurance).
Beneficiaries of industrial accident insurance (workers)
- A worker of a business covered by the industrial accident insurance who suffers from an occupational accident shall become a beneficiary of the industrial accident insurance (Articles 1 and 36 (2) of the Industrial Accident Compensation Insurance Act).
- The term "worker" means a person, regardless of the kind of occupation, who offers labor to a business or workplace for the purpose of earning wages (Subparagraph 2 of Article 5 of the Industrial Accident Compensation Insurance Act and Subparagraph 1 of Article 2 (1) of the Labor Standards Act).
· The term "work" means both mental work and physical work (Subparagraph 3 of Article 2 (1) of the Labor Standards Act).
· The term "wages" means wages, salary and any other kinds of money or valuables, regardless of their titles, which the employer pays to a worker as remuneration for work (Subparagraph 5 of Article 2(1) of the Labor Standards Act).
Occupational Accidents and Industrial Accident Compensation Insurance Benefits
Occupational accidents and industrial accident compensation insurance benefits
- Industrial accident compensation insurance benefits (hereinafter referred to as “industrial accident insurance”) shall be paid where a worker of a workplace covered by the industrial accident insurance suffers an occupational accident.
Occupational accidents
- Definition of occupational accidents
· The term "occupational accident" means any injury, disease, disability or death of a worker which is caused by an occupational reason (Article 5 (1) of the Industrial Accident Compensation Insurance Act).
- Standards for recognition of occupational accidents
· If a worker suffers any injury, disease or disability or dies due to any accident on duty or occupational disease, it shall be deemed an occupational accident (Main sentence of Article 37 (1) of the Industrial Accident Compensation Insurance Act).
· Even though a worker suffers any injury, disease or disability or dies due to any accident on duty or occupational disease, it shall not be deemed an occupational accident where there is no proximate causal relationship between their duties and the accident (Proviso to Article 37 (1) of the Industrial Accident Compensation Insurance Act).
· Although the standards for recognition of occupational accidents stated above are all met, any injury, disease, disability or death of a worker due to their intentional action, self-harm or other criminal act, or caused by such act shall not be deemed an occupational accident (Main sentence of Article 37 (2) of the Industrial Accident Compensation Insurance Act).
Insurance benefits
- A worker suffering from an occupational accident shall receive insurance benefits such as medical care benefits, temporary layoff benefits, disability benefits, nursing benefits, survivors' benefits, injury-disease compensation annuities, funeral expenses, and vocational rehabilitation benefits, etc. pursuant to the provisions prescribed by the Industrial Accident Compensation Insurance Act (Main sentence of Article 36 (1) of the Industrial Accident Compensation Insurance Act).
※ A worker suffering from pneumoconiosis caused by any occupational reason shall receive insurance benefits such as medical care benefits, nursing benefits, funeral expenses, vocational rehabilitation benefits, pneumoconiosis compensation annuities, and pneumoconiosis survivors' annuities (Proviso to Article 36 (1) of the Industrial Accident Compensation Insurance Act).