How is Workmen’s Compensation Insurance Policy Claim Settlement Amount calculated?

Workmen Compensation Insurance Policy Claim Amount Calculation

A Workmen’s Compensation Insurance Policy is a Policy which covers the legal liability of the employer to provide the compensation to an employee in case the employee suffers from an injury or death in the course of his employment. A Workmen’s Compensation Insurance Policy is also known as WC Insurance Policy.

This article describes in detail the calculation for Compensation Settlement under a Workmen’s Compensation Insurance Policy.

Which factors determine the Compensation to be given to the Workmen under the Workmen’s Compensation Insurance Policy?

The amount to be paid as Compensation to the employee under Workmen’s Compensation Insurance Policy depends on the following factors:

  1. Age of the Workmen
  2. Nature of his Injury – Death, Permanent Disability or Temporary Disability
  3. Average Monthly Salary of the Workmen

The maximum wages of the workman to be considered for the purpose of calculating the amount compensation to the workman is Rs15,000 per month.

Workmen Compensation Insurance Claim Settlement Amount for various Disabilities

How is the Compensation Calculated under the Workmen’s Compensation Insurance Policy in case of employee’s death?

The amount of compensation payable to the employee in case of his death is 50% of the monthly wages multiplied by the relevant factor specified in the Schedule IV of the Workmen’s Compensation Act subject to a minimum of Rs1,20,000.

How is the Compensation Calculated under the Workmen’s Compensation Insurance Policy in case of Permanent Total disability of the employee?

In case the Workman suffers from a Permanent Total Disability, the Injured Workman is entitled to a Compensation of 60% of the monthly wages multiplied by the relevant factor specified in the Schedule IV of the Workmen’s Compensation Act subject to a minimum of Rs1,40,000

How is the Compensation Calculated under the Workmen’s Compensation Insurance Policy in case of Permanent Partial Disability of the employee?

If the workman/employee suffers from Permanent Partial Disability, the amount of compensation to be paid depends on the nature of disablement and the percentage of loss of earning capacity as certified by a medical practitioner.

How is the Compensation Calculated under the Workmen’s Compensation Insurance Policy in case of Temporary Disability (Total or Partial) of the employee?

If the workman/employee suffers from Temporary Disability whether Total or Partial, the amount of compensation payable to the employee is 25% of the monthly wages payable to the employee every half month.

This Workmen Compensation Claim amount is payable on the 16th Day:

  • From the date of disablement where the disablement lasts for a period of 28 days or more
  • After the expiry of a waiting period of 3 days from the date of disablement where the disablement lasts for a period of less than 28 days

The maximum tenure for Temporary Disability under Workmen Compensation Insurance Policy (or WC Insurance Policy) is 5 years.

Summary of Workmen Compensation Insurance Claim Amount for various Disabilities

Type of Disability Claim amount under Workmen Compensation Insurance Policy
Accidental Death 50% of monthly wage * Relevant Age Factor subject to a minimum of Rs1,20,000
Permanent Total Disability 60% of monthly wage * Relevant Age Factor subject to a minimum of Rs1,40,000
Permanent Temporary Disability % Loss of Earning Capacity based on nature of disability as certified by a medical practitioner * Wages*Relevant Age Factor
Temporary (Total/Partial) Disability Half monthly payment of 25% of monthly wages

Relevant Age Factor under Schedule IV of Workmen’s Compensation Act

The compensation under the Workmen’s Compensation Insurance Policy depends on the Relevant Age Factor as prescribed under Schedule IV of Workmen Compensation Act (given below):

Relevant Age Factor under Schedule IV of Workmen Compensation Insurance Policy

Free Quote for Workmen’s Compensation Insurance Policy in 15 mins!

It is the duty of employers to provide a safe working environment to the employees. However, despite implementing the best safety measures and taking utmost precautions, accidents still happen and employers can be held liable in such a scenario.

A Workers Compensation Insurance Policy will take care of the employer’s liability in case the workers meet with an accidental death or disability in the course of their employment.

Qian is an experienced Workmen’s Compensation Insurance Broker having served multiple clients over the years and assisting them for Workmen Compensation claims as well.

If you wish to purchase a Workmen’s Compensation Insurance Policy, you can avail a free Workmen’s Compensation Insurance Policy Quote in 15 mins from the team at Qian.

Feel free to reach out to us at insurance@qian.co.in or 022-22044989.

  1. What is a Workmen’s Compensation Insurance Policy?
  2. A Workmen’s Compensation Insurance Policy is known as Workers Compensation Policy (WC Policy) or Employee Compensation Policy.
  3. What is the need for a Workmen’s Compensation Insurance Policy?
  4. What is the Workmen Compensation Act 1923?
  5. What are the Coverages under a Workmen’s Compensation Insurance Policy?
  6. What are the Add-On Covers under a Workmens Compensation Insurance Policy?
  7. What is the compensation amount payable under a Workmen’s Compensation Insurance Policy?
  8. What are Fatal and Non-Fatal accidents under Workmen Compensation?
  9. What is the Cost of a Workmen’s Compensation Policy?
  10. Can a Claim be filed under both the WC Act and Common Law?
  11. What are the Exclusions under a Workmen’s Compensation Policy?
  12. How to make a Claim under a Workmens Compensation Policy?
  13. Purchase a Workmen’s Compensation Policy with Qian!
  14. FAQS
  15. Testimonials

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