GOSI, Insurance and Liability: Who Carries What in a Manpower Supply Contract
Who pays GOSI occupational hazards and health insurance, who carries site liability, and which indemnity clauses to check in a manpower supply contract.
In a compliant Saudi manpower supply contract, the supplier retains statutory liability for GOSI contributions (including the 2% Occupational Hazards branch) and mandatory CCHI health insurance, while the client contractor maintains operational site safety supervision and third-party site liability insurance.
Key takeaways
- The manpower supplier is legally responsible for mandatory GOSI contributions, including the 2% Occupational Hazards scheme.
- Private medical insurance under Council of Cooperative Health Insurance (CCHI) guidelines remains the legal duty of the primary sponsor.
- The client contractor carries operational duty of care and must provide site-specific safety inductions, safe equipment, and valid work permits.
- Contractual indemnification clauses must explicitly define liability for workplace accidents, equipment damage, and regulatory non-compliance.
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The division of responsibility: Statutory vs. operational liability
A temporary manpower contract has to separate two things: what the supplier owes as the legal employer, and what the contractor owes as the party running the site. If the contract blurs them, both sides find out after an accident, when it is hardest to settle.
In practice, liability falls into two parts: 1. Statutory Employer Liability: Legal obligations attached to the sponsorship of the worker under the Social Insurance Law and Cooperative Health Insurance Law. These belong to the manpower supplier. 2. Operational Site Liability: Obligations arising from the physical control, supervision, and safety management of the active work front. These obligations belong primarily to the client contractor who controls the job site.
Liability allocation matrix: Who carries what?
The table shows the usual split. Your contract can allocate the non-statutory items differently, so treat it as a starting point for negotiation.
| Coverage / Risk Type | Carried By | Statutory Framework | Contractual Allocation |
|---|---|---|---|
| GOSI Occupational Hazards (2%) | Manpower Supplier | GOSI Social Insurance Law | Mandatory employer contribution covering medical treatment, disability, and death resulting from workplace injuries |
| Cooperative Health Insurance | Manpower Supplier | CCHI Regulations | Mandatory private medical policy linked to annual Iqama renewal; covers general illness and outpatient care |
| Third-Party Site Liability (CGL) | Client Contractor | Project Commercial Agreement | Contractor's Commercial General Liability policy covers damage or injury caused to third parties within the site boundary |
| Plant / Equipment Damage | Allocation by Fault | Supply Agreement Terms | Supplier indemnifies gross operator negligence; contractor covers site hazards, improper equipment maintenance, and normal wear |
| HSE Induction & PPE Compliance | Joint (Shared) | Saudi Labor Law & Site HSE Manual | Supplier provides standard baseline PPE; contractor provides specialized site PPE (gas monitors, breathing apparatus, specialized harnesses) |
GOSI Occupational Hazards: Work injuries and reporting obligations
Under the General Organization for Social Insurance (GOSI), all private sector employers in Saudi Arabia must register non-Saudi workers in the Occupational Hazards Branch by paying a mandatory 2% monthly contribution based on the employee's contributory wage.
In the event of a workplace accident or occupational injury on site: - Immediate First Aid & Hospital Transport: The client contractor is operationally responsible for providing immediate site first aid and transport to an approved medical facility. - Reporting to GOSI: the supplier, as employer, reports the injury through its GOSI account within the deadline GOSI sets. Tell the supplier the same day so the deadline is not missed. - GOSI benefits: GOSI covers the medical treatment of a work injury, a daily allowance during temporary disability, and compensation for permanent disability or death.
If the supplier has not kept its contributions up to date, the worker's benefits can be disputed, and both companies can face compensation claims in court.
Health insurance (CCHI) verification for site mobilisation
Every expatriate worker in the Kingdom must hold health insurance under the cooperative health insurance rules, and an iqama cannot be renewed without an active policy.
Contractor procurement teams should require proof of active CCHI coverage during pre-qualification. If a worker experiences a non-occupational medical emergency on site (such as heat stroke, cardiac distress, or acute illness), a valid medical card avoids an argument over who pays at the hospital.
Indemnity clauses to review
Ask your legal team to cover these cases in the contract:
- Labor Law Non-Compliance: The supplier must indemnify the contractor against all fines, penalties, and legal costs arising from invalid Iqamas, missing Ajeer notices, or Nitaqat violations. - Worker Claims: The supplier must indemnify the contractor against claims for unpaid wages, end-of-service benefits, or statutory allowances. - Equipment Operation: For heavy equipment operators (such as crane operators), clauses must clarify whether damage to client assets is covered by the supplier's professional liability or the contractor's all-risk project insurance.
To see which company documents Gulf Orbit provides and how worker documents are reviewed per project, visit our trust and compliance page, or send your requirement through the manpower request form.
*This article is practical guidance for contractors in Saudi Arabia, not legal advice. Check requirements against current HRSD and GOSI rules. Last reviewed: October 2026.*
Frequently asked questions
Who pays for medical treatment if a supplied worker is injured on our project?
For a work injury, GOSI's occupational hazards branch covers treatment and hospital care, provided the supplier's contributions are up to date and the injury is reported on time.
Can an injured supplied worker sue the client contractor directly for compensation?
Under Saudi law, statutory injury benefits are administered through GOSI. However, if an accident is caused by gross negligence, unsafe working conditions, or lack of safety equipment on the contractor's site, the contractor can face direct civil liability claims in Saudi courts.
Does the manpower supplier provide Commercial General Liability (CGL) insurance for our site?
Normally not. Site liability insurance sits with the contractor running the project. The supplier's statutory cover is GOSI and health insurance; if you need any other policy from the supplier, name it in the RFQ and get it confirmed in the contract.
How do we verify that a supplier's GOSI account is in good standing?
Ask for a GOSI compliance certificate issued within the last 90 days. The certificate confirms that all employer and employee contributions are fully settled with no outstanding arrears.