On May 7, 2023, the new Law on Occupational Safety and Health (“OSH Law“) entered into force, introducing a number of changes to the system of protection of workers’ rights and contributing to full alignment with European standards. Employers have been given a two-year period thereof, i.e. until May 7, 2025, to organize their operations in compliance with the OSH Law. This organization of business also includes insurance of employees in the event of a work-related injury and occupational diseases.

Who must Insure its Employees?

The obligation to insure employees against work-related injuries and occupational diseases is prescribed under Article 67 of the OSH Law, which provides that employer is required to insure its employees against such risks to ensure coverage for damages, and that the financial cost of insurance is borne by the employer, and the conditions and procedures for insurance are regulated by law.

The wording of this provision remains unchanged from the previous law. However, a separate law regulating insurance against work-related injuries and occupational diseases, referred to in the cited provision, has not been adopted yet. Given this situation and considering that the new OSH Law provides for monetary fines if this obligation is not fulfilled, the question arose as to whether employers are still required to comply therewith.

The answer to the question was confirmed at the panel discussion “Occupational Safety and Health: Compliance with New Regulations and Practical Challenges,” held at the American Chamber of Commerce in Serbia on April 24, 2025. Representatives of the Directorate for Occupational Safety and Health and the Labor Inspectorate, under the Ministry of Labor, Employment, Veteran and Social Affairs, confirmed that employers are required to insure their employees despite the absence of a separate law, by applying the existing regulations.

Therefore, all employers, regardless of the type of activity they engage in, are required to insure their employees until May 7, 2025. This includes employers in sectors such as retail, finance and insurance, education, construction, agriculture, mining, manufacturing, energy and water supply, healthcare, and many others.

According to information shared during the panel, no separate regulation on the conditions and procedures for insurance is expected to be adopted in the near future.

Until a separate law is enacted, employers may insure their employees in accordance with the applicable insurance regulations, such as the Law on Insurance.

Thus, below please find an overview of the relevant provisions of the Law on Insurance.

What Does Employee Insurance Include?

Accident insurance, including insurance against work-related injuries and occupational diseases, is a type of non-life (general) insurance under the Law on Insurance, covering:

• payment of contracted monetary compensation in case of an accident;
• reimbursement of contracted expenses in case of an accident;
• a combination of monetary compensation and reimbursement of expenses in case of an accident;
• payments resulting from injury, health impairment, or death of a passenger.

Collective insurance of employees against work-related injuries and occupational diseases typically includes insurance against accidents (including death and permanent disability) and insurance against occupational diseases (diagnosis and bodily/organ impairment due to an occupational disease). The insurance premium amount depends on the level of risk, the employer’s activity, and the nature of the work (whether it involves increased risk or not).

Employees must be insured while performing their work duties, both at and outside of work, including commuting from home to work and vice versa, as well as during business trips.

Tax Treatment of Insurance Premium Payments

From the perspective of the Personal Income Tax Law, insurance premiums paid by an employer for all employees under non-life collective accident insurance, including insurance against work-related injuries and occupational diseases, collective insurance for severe illnesses and surgical interventions, as well as collective life insurance for cases of employee death due to illness, are not considered salary income. Additionally, according to the Law on Tax on Non-Life Insurance Premiums, no tax is payable on insurance premiums arising out of conclusion and performance of non-life insurance contracts for accident insurance and insurance against work-related injuries and occupational diseases.

What are Penalties for Employers who do not Insure their Employees?

 The OSH Law prescribes fines for non-compliance. An employer that is a legal entity may be fined between 1,000,000 and 1,500,000 dinars for failing to insure employees against work-related injuries and occupational diseases. An employer that is an entrepreneur may be fined between 200,000 and 400,000 dinars for the same offense. A director or another responsible person within the employer’s organization may face a fine between 30,000 and 150,000 dinars, and a natural person acting as an employer may also be fined between 30,000 and 150,000 dinars.

For additional information or legal assistance regarding the issue of mandatory insurance for employees in case of work-related injury and occupational disease, feel free to contact us by email: office@pricapartners.com.