According to Article 48 of the Law of People's Republic of China (PRC) on Work Safety, production and business operation entities must participate in work-related injury insurance according to law and pay insurance premiums for employees. The state encourages production and business operation entities to participate in production safety liability insurance.
Work-related injury insurance is a social security system that collects the work-related injury insurance premiums paid by employers and establishes a work-related injury insurance fund to provide practical legal medical care and necessary economic compensation for workers who suffer accidental injuries or occupational diseases in production and business activities, resulting in death, temporary or permanent loss of working ability. This kind of compensation includes not only medical and rehabilitation expenses, but also the cost of ensuring basic living. According to the Law of People's Republic of China (PRC) on Work Safety:
Production and business units must participate in industrial injury insurance according to law and pay insurance premiums for employees.
The state encourages production and business operation entities to participate in production safety liability insurance.
According to the Guiding Opinions of the State Administration of Work Safety on Promoting Safety Production Liability Insurance in High-risk Industries (No.[2009]137):
Based on a comprehensive analysis of the advantages and disadvantages of industrial injury social insurance and various types of commercial insurance, the liability insurance for production safety is a new type of insurance and system with certain public welfare nature, which is promoted by the government, enforced by legislation and professionally operated by commercial insurance institutions.
The purpose of promoting safety production liability insurance is to introduce the risk management function of insurance into the safety production supervision system, realize the organic combination of risk professional management and safety supervision, and finally reduce accidents, promote safety production and improve the handling ability of safety production emergencies by strengthening pre-risk prevention.
The introduction of insurance system in the field of safety production, especially the promotion of safety production liability insurance in high-risk industries, is an important measure for the comprehensive management of safety production, which has been proved to be effective internationally.