Portugal Insurance Information

CIA link to demographic/economic data on Portugal

General Portugal Insurance Information

• Compulsory Insurance:
  
  1. Third Party Automobile Liability;
  2. Workers’ Compensation;
  3. Miscellaneous other legal liabilities (e.g., Contractors, Insurance Brokers, Travel Agents, etc.).
• Non-Admitted Insurance:
  Prohibited except in the event that coverage or capacity is not available locally and then only with permission. It is unlawful for non-admitted Insurers to write business in Portugal. Due to the EU Directives concerning freedom of services, changes will be forthcoming.
• Policy Wordings & Rates / Tariffs Controlled:
  All policy wordings must be submitted for approval to the Instituto de Seguros de Portugal. Tariffs are subject to interpretation meaning that guidelines exist but rates can be negotiated for most lines.
• Policy Language:
  Portuguese.
• Types of Insurance Restricted to Government Institutions:
  None known.
• Policy Currency:
  euro (EUR)
  note: on 1 January 1999, the European Monetary Union introduced the euro as a common currency to be used by financial institutions of member countries; on 1 January 2002, the euro became the sole currency for everyday transactions within the member countries. U.S.$ insurance (or other currency) is not allowed..
• Currency Restrictions / Exchange Controls:
  No restrictions other than all policies must be issued in Euros.
• Policy Period:
  Annual. Long Term Agreements (LTAs) are not available.
• Cancellation Provisions:
  30 day written notice by either party.
• Premium Tax, etc. paid by Insured:
  Stamp Duties for all policies – 3%;
  Agricultural, WC, PA, Credit, Health – 5%;
  Fire, Multi risks on dwellings, all other classes – 9%;
  Taxes: 7.5% on WC to FUNDAP
  FBC 13% for fire and for hazardous Marine/motor cargoes;
  FBC 6% for Agricultural and
  3.9% for Multi risks dwellings
  1% for WC, PA, Motor, Health and Life in respect of emergency treatment.
  Paid by Insurer:
  0.35% non-life
  0.10% Life and Pensions
  2.5% to Fundo de Graantia Automovel
  10% of all crop premiums
  Contribution of 0.75% of WC premiums to FUNDAP
  
• Insurance Companies:
  
• Brokers:
  Brokers are common and must be licensed / registered with the Instituto de Seguros de Portugal. Generally brokers from any EU country can operate in Portugal.
• Brokerage Commissions:
  Fire - 23.5%;
  Liability - 18.5%;
  Automobile - 15.5%;
  Personal Accident - 21%;
  Workers’ Compensation - 16%.
  Note: Commissions cannot be paid to foreign brokers not registered in Portugal.
• Broker of Record Letters:
  
• Reinsurance:
  No restrictions known.
• Local Natural Hazards:
  Earthquake, flood and storm are the main exposures. Normally sub-limits do not apply, cover is same limit as fire but with a flat deductible. EQ deductible is usually 2% of the sum insured.
• Other Information:
  

Property Insurance

• Fire:
  Standard fire perils include - fire, lightning and explosion. Aircraft, earthquake, flood, storm / tempest, burst water pipe, riot / civil commotion, malicious damage, windstorm / hurricane, vehicle impact are available in the market for an additional premium charge.
• All Risk:
  Traditionally only available for Contractors related risks.
• Coinsurance:
  100%.
• Blanket Insurance:
  Available.
• Business Interruption:
  Usual form is UK Loss of Profits.
• Replacement Cost:
  Available.
• Discount for fire protection equipment / systems: Negotiable and available.

Boiler & Machinery / Machinery Breakdown / Engineering

• Wordings:
  UK, U.S. and German forms common. Boiler explosion, Machinery Breakdown, Business Interruption are usual. Boiler explosion can be written under the fire (property) policy. Inspections are mandatory. Wordings must be approved by the appropriate authorities.

General / Public Liability

• Available Wordings:
  Local, General and Public Liability forms are available. Product Liability, Contingent Automobile and Employer’s Liability coverages are available. Product Recall insurance is not available in the Portuguese market.
• Comments:
  Coverage usually provided on a ‘per accident’ basis.

Automobile / Motor

• Compulsory Limits:
  Minimum limits conform with EU standards.
• Comments:
  Coverage applies to the Insured and any licensed individual driving with the Insured’s permission. Passengers are deemed to be Third Parties.

Workers’ Compensation

• Comments:
  Coverage is compulsory for all employees (including foreign nationals) and can only be written by Authorized Insurers. Extra-Territorial and Medical Expense benefits are covered. Industrial disease obligatorily insured with Government agency. Physical work accident freely insurable with private insurers, which is compulsory in respect of all employed, and self-employed people. Ministry of Labor insurers accidents at work, compensation benefits are calculated in accordance with complicated formulae that may or may not bear any relationship to earnings.
  
  Employer’s Liability is available separately or as part of the Public/General Liability policy, but in practice little or no demand exist for the coverage. Employers penalized for transgressions of the injury code, and employees have the right of action for employers negligence.

Marine

• Available Wordings:
  Follow the Institute of London Underwriters. War Risks rates follow London scale.

Crime

• Available Coverages:
  Crime, Fidelity (schedule or blanket bases), Surety. Theft cover available following violent or forcible entry of private or business property, but not for larceny. ISP has introduced an advisory tariff for burglary which is not obligatory.