Employers in Puerto Rico must insure employees against work-related accidents, including employers that hire independent contractors, unless the contractor is both an independent contractor and is already insured.

The Puerto Rico State Insurance Fund Corporation (SIFC) is the only workers’ compensation insurance provider from which all workers’ compensation coverage must be purchased in Puerto Rico by law. The SIFC is commonly referred to as CFSE, by its Spanish acronym.

Insured employers are immune from lawsuits that arise from work-related accidents or employee illnesses. Medical treatment, disability, and administrative expenses involved in treatment or compensation of employees are paid by the insurer, excepting a lapse in coverage or illegal acts.

Annual permanent policies are calculated using a percentage of expected wages paid, the type of work, and the industry. The SIFC periodically revises and publishes the insurance rates for these policies based on risk classifications. The applicable rates through June 30, 2025, are posted on the CFSE’s website.

Employers with permanent policies must report the actual wages for the year ended June 30 and provide a projected payroll estimate on or before July 20 to renew annually. A paid permanent policy covers from July 1 to June 30 of the following year. Employers pay half of the prior year premium with the payroll statement. Although the balance is not due until the payment due date of the notice received in September or October, failure to timely file a payroll statement or pay the balance by the due date will result in a lapse in coverage.

Construction projects and similar fixed-term works are typically covered by temporary policies. Such premiums are based on the expected type of work and related cost.

Chauffers’ Insurance is a separate government mandated insurance required for Puerto Rico employees whose work requires operating a motor vehicle.