Liability, factories and the state: Swiss accident law from 1875 to 1918

Strict liability arrives in Swiss law

Zurich Insurance grew up inside a legal revolution. Before the 1870s, a worker injured in a Swiss factory or on a railway could recover damages only if he proved the fault of the employer or of a person for whom the employer answered, a burden that was often impossible to discharge after an explosion or a collision. The federal legislator changed this in two steps. The Federal Act on the Liability of Railway Companies for Injuries of 1875 introduced strict liability (Kausalhaftung) into Swiss law, so that compensation no longer depended on personal fault. Two years later the Federal Factory Act of 1877 applied the same strict logic to the liability of factory owners for accidents at work.¹

The Factory Act was a landmark of social legislation in its own right. It prohibited the employment of children under fourteen in factories, fixed a maximum working day of eleven hours and created a corps of federal factory inspectors.² It passed the referendum of 1877 with only 51.5 per cent of the votes, a narrow margin that shows how contested the regulation of industrial labour still was.³ The Federal Act on Liability arising from Factory Operation (Fabrikhaftpflichtgesetz) of 1881 then specified the liability of factory owners. Although it limited the scope of liability in some respects, an amendment of 1887 extended it to trades outside the factories in the strict sense, such as construction and carting. The Historical Dictionary sums up the consequence in one sentence: entrepreneurs increasingly insured their risk.⁴

For Zurich and Winterthur this was the decisive market. An employer who was liable without fault for every accident in his workshop, with damages measured by the lost earnings of the injured worker or the maintenance of his widow and children, could not carry that exposure on his own books. He could, however, buy a policy that paid the compensation owed under the liability acts in return for a premium calculated on his payroll and the danger of his trade. The history of social protection in Switzerland records that after the liability law of 1881 employers increasingly obtained insurance from private insurers against accident risks.⁵ The Swiss Re history of insurance in Switzerland likewise treats the Factory Act of 1877 as the catalyst that carried accident insurance beyond industrial risks into the market for private customers.⁶

The system had obvious weaknesses, which became the argument for its replacement. Liability insurance protected the employer against claims, but it left the injured worker to establish those claims, often through litigation against an insurer with far greater resources. Where the employer was uninsured or insolvent, the worker received nothing. Disputes about whether an accident had occurred “in the operation” of a factory, or whether the worker had caused it by his own gross fault, filled the courts. The Historical Dictionary speaks of problems of enforcement that led in 1918 to the replacement of employers’ liability by compulsory accident insurance.⁷

The long road to compulsory accident insurance

The model for that replacement came, again, from Germany. Bismarck’s imperial message of 17 November 1881 announced a comprehensive system of social insurance, and Germany introduced compulsory accident insurance through employer-financed trade associations in 1884. In Switzerland, 1885 has been called the socio-political turning point, when the proposal of compulsory accident insurance for workers entered the political debate. On 26 October 1890 the people and cantons accepted a new Article 34bis of the Federal Constitution, which empowered the Confederation to legislate on sickness and accident insurance, with 75.4 per cent of the vote.⁸

Turning the constitutional mandate into law took more than twenty years. The first bill, drafted by the Winterthur lawyer and National Councillor Ludwig Forrer and known as the Lex Forrer, combined sickness and accident insurance in a single ambitious scheme. It was rejected in the referendum of 20 May 1900 with only 30.2 per cent in favour, and only the canton of Glarus voted yes. Opposition came from a heterogeneous coalition of federalists from western Switzerland, conservatives, mutual aid societies and the private insurers. The second attempt, launched in 1904 under Forrer, by then a Federal Councillor, narrowed the scope and gave the future accident insurance institution an independent status modelled on the Swiss National Bank, a design attributed to the Zurich banker Paul Usteri. Parliament adopted the Federal Act on Sickness and Accident Insurance (KUVG) on 13 June 1911, which the people accepted on 4 February 1912 by some 287,000 votes to 241,000.⁹

The same Suva history names the leader of the private insurers’ campaign against the 1912 law: Fritz August Meyer, the general director of Zurich Insurance, the “Reserves Meyer” of the company’s own tradition. The defeat was a serious one for his company.¹⁰ The KUVG created the Swiss Accident Insurance Institution (Schweizerische Unfallversicherungsanstalt, SUVA, today Suva) in Lucerne with a monopoly of compulsory accident insurance for workers in industry and in the trades covered by the liability laws. Delayed by the First World War, the institution began operations on 1 April 1918. Organised as an autonomous institution of public law, it had a board that brought together representatives of employers, employees and the Confederation.¹¹

The impact of the Suva monopoly on private insurers

For the private accident insurers the Suva monopoly meant the loss of their core Swiss business. According to the Swiss Re history of Swiss insurance, the private companies lost about ten per cent of their annual premium income immediately when the Suva opened in 1918.¹² The effect would have been much graver had Zurich still depended on its home market. Because the company had long earned most of its premiums abroad, and because it had entered the United States in 1912, it could absorb the loss. The Suva history observes that Winterthur and Zurich in particular adapted by expanding into other branches of insurance and that by 1913 Swiss insurers already earned 63 per cent of their premiums abroad.¹³ A monopoly at home thus reinforced the orientation of the Zurich accident insurers towards foreign markets, a pattern that recurs in Swiss financial history whenever the domestic market is narrow or closed.

What remained open to them in Switzerland was the business outside the monopoly: accident insurance for trades and occupations not subject to the KUVG, individual accident insurance, travel insurance, and the growing field of third-party liability insurance for risks that the Suva did not cover. The Historical Dictionary lists individual and collective accident insurance, travel insurance, liability insurance and motor insurance as the key segments of Zurich’s business in this period.¹⁴ Liability insurance in particular grew with each new special statute. After the railway and factory acts, the Swiss legislator introduced liability rules for electricity in 1902, for aviation in 1920, for road traffic in 1932 and later for pipelines, water protection, nuclear energy and environmental harm. After the Second World War, the Historical Dictionary observes, risk was shifted more and more onto insurance, so that questions of responsibility arose only in a subsidiary way.¹⁵

The monopoly lasted in its original form until the Federal Accident Insurance Act (UVG) of 1981 entered into force in 1984. The new law extended compulsory accident insurance to all employees above a minimum level of employment and admitted commercial insurance companies as providers of the compulsory cover.¹⁶ The Suva kept its monopoly for the enterprises and occupational groups listed in Article 66 UVG, which include most of the industrial and construction sectors. Employers outside that list, mainly in services and commerce, may insure their staff with a private insurer authorised under Article 68 UVG, with a health insurance fund or with the public accident insurance fund. Zurich is one of the authorised private insurers and markets both the compulsory cover and the supplementary accident insurance that tops up benefits for salaries above the statutory ceiling.¹⁷ A century after Fritz Meyer’s lost campaign, his company thus writes statutory accident insurance in Switzerland again, within a dual system that assigns the most dangerous sectors to a public monopoly and leaves the remainder to competition.

For the financial centre, the episode left a lasting imprint. It fixed the division of labour between social insurance and private insurance that still marks Swiss law: compulsory first-party cover for the worker through the Suva or an authorised insurer, and private liability cover for the employer and for third-party claims that fall outside the social insurance system. It also created, at the level of the Suva, one of the largest institutional investors in the country, operating alongside the private insurers but under different rules. And it confirmed a habit of the Zurich insurers to treat regulatory change at home as a reason to grow abroad.

Notes

1. Bernard Degen, “Haftpflicht”, Historisches Lexikon der Schweiz (HLS), version of 12 August 2010, https://hls-dhs-dss.ch/de/articles/016585/2010-08-12/. The article also notes that the general part of Swiss liability law has been laid down in the Code of Obligations since 1881 and that Swiss railway and factory liability followed the model of the German Reichshaftpflichtgesetz of 1871. ↩
2. Geschichte der Sozialen Sicherheit in der Schweiz, “Arbeit und Berufsunfälle”, https://www.geschichtedersozialensicherheit.ch/risikogeschichte/arbeit-und-berufsunfaelle. ↩
3. Suva, “Zwei Anläufe und ein deutsches Vorbild”, history of the Suva, https://www.suva.ch/de-ch/ueber-uns/die-suva/meilensteine/entstehung/entstehung. ↩
4. Degen, “Haftpflicht”, HLS, https://hls-dhs-dss.ch/de/articles/016585/2010-08-12/. ↩
5. Geschichte der Sozialen Sicherheit in der Schweiz, “Arbeit und Berufsunfälle”, https://www.geschichtedersozialensicherheit.ch/risikogeschichte/arbeit-und-berufsunfaelle. ↩
6. Swiss Re, Geschichte der Versicherung in der Schweiz, brochure, https://www.swissre.com/dam/jcr:c24c1c66-3045-47d5-a4ca-4829f67c59dd/Markt_Broschuere_Schweiz_DE_web.pdf. ↩
7. Degen, “Haftpflicht”, HLS, https://hls-dhs-dss.ch/de/articles/016585/2010-08-12/. ↩
8. Suva, “Zwei Anläufe und ein deutsches Vorbild”, https://www.suva.ch/de-ch/ueber-uns/die-suva/meilensteine/entstehung/entstehung. The same page reports the first official accident statistics for 1888 to 1891, which counted 1,020 deaths from workplace accidents. ↩
9. Suva, “Zwei Anläufe und ein deutsches Vorbild”, https://www.suva.ch/de-ch/ueber-uns/die-suva/meilensteine/entstehung/entstehung. ↩
10. Suva, “Zwei Anläufe und ein deutsches Vorbild”, https://www.suva.ch/de-ch/ueber-uns/die-suva/meilensteine/entstehung/entstehung, which identifies “Fritz August Meyer, Generaldirektor der Zürich Versicherung” as the leader of the private insurers’ opposition to the 1912 referendum. ↩
11. Geschichte der Sozialen Sicherheit in der Schweiz, “Schweizerische Unfallversicherungsanstalt (Suva)”, https://www.geschichtedersozialensicherheit.ch/artikel/institutionen/kassenwesen/schweizerische-unfallversicherungsanstalt-suva. The article describes the tripartite composition of the governing council with sixteen seats each for employers and employees and eight for the state. ↩
12. Swiss Re, Geschichte der Versicherung in der Schweiz, brochure, https://www.swissre.com/dam/jcr:c24c1c66-3045-47d5-a4ca-4829f67c59dd/Markt_Broschuere_Schweiz_DE_web.pdf. ↩
13. Suva, “Zwei Anläufe und ein deutsches Vorbild”, https://www.suva.ch/de-ch/ueber-uns/die-suva/meilensteine/entstehung/entstehung. ↩
14. Elena Folini, “Zürich Versicherungen”, HLS, https://hls-dhs-dss.ch/de/articles/041840/. ↩
15. Degen, “Haftpflicht”, HLS, https://hls-dhs-dss.ch/de/articles/016585/2010-08-12/. The article also records that product liability was added in 1993 and that a comprehensive reform of Swiss liability law, started in 1988, was abandoned in 2009 in favour of a partial revision of the limitation periods. ↩
16. Geschichte der Sozialen Sicherheit in der Schweiz, “Schweizerische Unfallversicherungsanstalt (Suva)”, https://www.geschichtedersozialensicherheit.ch/artikel/institutionen/kassenwesen/schweizerische-unfallversicherungsanstalt-suva. ↩
17. Zurich Switzerland, “Unfallversicherung Schweiz: UVG erklärt”, https://www.zurich.ch/de/services/wissen/firmen/uvg-schweiz. The page states that the Suva holds an accident insurance monopoly for the enterprises listed in Article 66 UVG and describes the supplementary cover for salaries above the maximum insured earnings of CHF 148,200. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of September 2025.