Due to Failure to Take out a WIA Excess Insurance, the Employer is Liable for the Damage

Due to Failure to Take out a WIA Excess Insurance, the Employer is Liable for the Damage
Date: 05-11-2023
Year of publication en number of publication: 2023 / 525
Reference: Court of Appeal Amsterdam, September 19, 2023, ECLI:NL:GHAMS:2023:2524

An employer who could not provide the Court with sufficient information to enable it to assess whether an incapacitated employee was entitled to the benefits under a WIA Supplementary Incapacity Insurance policy, was ordered to pay the employee compensation due to the lack of coverage under a WIA Excess Insurance. According to the Court, the employee could have expected that such insurance had been taken out on his behalf.

In July 2017, an employee, working at a large foreign company in the IT sector, became incapacitated for work. Later, when he was fully and permanently incapacitated for work, the UWV granted him an IVA-benefit. The employee litigated a case against his employer on the question of whether the employer was liable for the fact that no WIA Excess Insurance had been taken out for the employee. This supplementary insurance would cover the employee's risk of loss of income due to incapacity for the part of the wage that exceeds the maximum daily wage and for which the WIA therefore does not provide benefits.
On appeal, the Court of Appeal ordered the employer to submit a large number of documents. The employer only partially complied with this request. The Court therefore concluded that the employer had insufficiently informed the Court to enable it to assess the employee's insurance situation during the years 2015 to 2019.
Based on the documents submitted, the Court concluded that it could not be ruled out that a WIA Excess Insurance policy had been in force for the employee during the years preceding 2016. Given the level of his income, the employee had a great interest in this insurance. According to the employer, in 2016 changes were made in the pension scheme, with the result that as of January 1, 2016, a WGA Benefit Shortfall Insurance applied to all employees and that only for a limited group of employees who had previously been employed by Philips, which did not include the employee, a WIA Excess Insurance applied.
Due to the inadequate information provided by the employer, the Court stated that it could not be ruled out that the employee had initially been covered by a WIA Excess Insurance and that the premiums had also been paid, but that this had been reversed at a later stage.
If this was done after the employee's first day of incapacity, it would have been negligent towards the employee, according to the Court. It considered a unilateral termination of an insurance without notification to that effect to the employee contrary to good employment practice.
But even if no WIA Excess Insurance had been taken out for the employee, the Court was of the opinion that the employer had acted contrary to good employment practice. During a presentation the employee, as well as others, were informed that they would receive a bid for a WIA Excess Insurance. Subsequently, from 2016 onwards, the employee had received pension overviews from an insurer stating that WIA Excess Insurance had been taken out for the employee. The fact that this was a mistake on the part of the intermediary or the insurer, as the employer stated, was not relevant, according to the Court: the intermediary should be regarded as an auxiliary person of the insured and the insurer only executes the employer's pension commitment.
The Court concluded that the employer had acted contrary to good employer practices and that he was therefore obliged to compensate the employee for damages.
The damage amounted to almost half a million euros, plus interest at the statutory rate.


When, either mandatorily or voluntarily, employers promise a pension or take out an income insurance for the benefit of their employees, these employers may face major financial obligations if, due to a mistake on the part of the employer, employees are not eligible for the benefits they would have been entitled to without this error. In such case they have to compensate the employee for damages, which may involve large amounts. Not only damage suffered by the employee himself, such as no pension accrued, no entitlement to exemption from pension premiums in the event of incapacity or no entitlement to benefits in the event of incapacity, but also damage suffered by the employee's surviving relatives, such as no entitlement to widow's and orphan's pension, will be included
These cases often involve an omission of the employer to register the employee or the employee's partner with the pension provider or insurer. But also mistakes, made when informing employees about the expected benefits, may create the problem. Employers are therefore advised to seek assistance from an expert intermediary and to closely follow this intermediary’s advice. This will prevent many mistakes. Should a mistake still be made, then, probably, the damage can be recovered from the intermediary’s professional liability insurer.