How to find out if our activity requires compulsory insurance

How to know if our activity requires mandatory insurance
5 Dec 2022

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A recurring question we are asked by the organizations or clients we advise is to know which insurance policies are mandatory in Spain, that is to say, the insurance policies that are imposed by law and which, logically, make it necessary to contract them to avoid greater evils.

It is well known that the exercise of certain activities is legally conditioned to the contracting of a mandatory and specific insurance that, if it does not exist, could result in an administrative sanction with fines ranging from 1,000 € to 20,000 €.

What insurance is mandatory in Spain

As I said, the compulsory nature of insurance is established by law, a regulation or a collective agreement. In Spain there are already more than 800 compulsory insurances, of which the following are the best known:

  • Compulsory motor vehicle liability insurance.
  • Damage insurance on any mortgaged property.
  • Hunter's civil liability insurance.
  • Civil liability insurance as owner of a potentially dangerous breed animal.
  • Compulsory insurance for passengers on public transport.
  • Liability insurance for recreational or sport boats, as well as nautical motorcycles.
  • Life or accident insurance defined as mandatory in collective bargaining agreements.
  • Compulsory sports insurance required from sports federations for registered athletes when participating in competitions.
  • Liability insurance if you intend to conduct a clinical trial with drugs.
  • Environmental liability insurance.
  • Professional liability insurance, e.g. for health professionals in private health care.
  • Liability insurance for school transportation activities.
  • Liability insurance for elevator installation and maintenance companies.
  • Liability insurance for nuclear damage.

These are some of the mandatory insurances required and perhaps the best known, but there are others that go virtually unnoticed by most companies:

  • Extraordinary risk insurance.
  • Combined agricultural insurance.
  • Forest fire insurance.
  • Insurance of amounts advanced to the construction and sale of homes.
  • Liability insurance derived from the production and management of toxic and hazardous waste.
  • Insurance broker's liability insurance.
  • Travel agency liability insurance.
  • Civil liability insurance for promoters of bullfighting events.
  • Civil liability insurance for promoters of pyrotechnic shows.

Not having them could result in heavy penalties in Spain, ranging from €600 to €2,000 for not having insurance on a vehicle, in accordance with the Law on Civil Liability and Insurance in the Circulation of Motor Vehicles, or more than €15,000 for not taking out the insurance required by a collective labor agreement for work-related contingencies.

How to know what compulsory insurance my business or business activity requires

In 2016, and given the difficulty of knowing whether a specific activity required the need to take out insurance, due to the wide range of legislation that includes this need, the Insurance Compensation Consortium (CCS) created the Register of Compulsory Insurance (RSO) where updated information can be located on the existing compulsory insurance in Spain, whether statewide or in a specific Autonomous Community, and the specific legal provisions that regulate them, its purpose being exclusively informative.

The information contained in the RSO at any given time, as regards the compulsory insurance policies registered therein and the information on each one of them, is strictly the information sent to the RSO up to that moment by the different corresponding bodies of the state or autonomous administration. 

The CCS is legally entrusted with the management of this RSO and, in its capacity as manager of the RSO, prepares an annual report on the content of the RSO, which includes, on the one hand, lists of compulsory insurance policies ordered by different criteria (date of entry into force; activities for which compulsory insurance is required; legal rank of the rules that regulate them; and state or autonomous community scope) and, on the other, the changes that occurred during the year (new insurance policies; modified insurance policies; and suppressed insurance policies).

The RSO information is public, refers to compulsory insurance in force at any given time, and can be consulted on the website.

Finally, it should be pointed out that the requirement of compulsory insurance can only be established by a state or autonomous community law, thus preventing town councils and provincial councils from legislating in this field. In turn, a report from the Directorate General of Insurance (DGS) and communication to the RSO within one month is mandatory. 

In view of the above, and when in doubt about starting an activity or operation of any kind in Spain, we recommend searching, for greater legal certainty, in the RSO, thus avoiding possible administrative sanctions, and at the same time covering the possible financial loss in the event of a claim.

Our insurance lawyers can help you in case of doubts or penalties for not having the mandatory insurance corresponding to your business activity. You can contact them here

Juan Francisco Gutiérrez

Director expert in Insurance Sector

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