Buy Workmen's Compensation Insurance Policy

What is a Workmen's Compensation Insurance Policy?

A Workmen’s Compensation Insurance Policy (also known as WC Insurance Policy or a Workers Compensation Insurance Policy) is a type of an Insurance Policy taken by the employers to secure themselves against the Legal Liability of an employer to provide compensation to employees in case they suffer from Bodily Injury or Death on account of Accidents or Diseases in the course of their work.

A Workmen’s Compensation Insurance Policy (also known as Workers Compensation Insurance Policy) primarily offers Indemnity against the Legal Liability of an employer to Employees under the Indian Workmen Compensation Act (WCA) of 1923, the Fatal Accidents Act of 1855 and the Common Law. A Workmen Compensation Insurance Policy is also known as Employee Compensation Insurance Policy.

What is the Workmen Compensation Act 1923?

The Workmen Compensation Act 1923 makes it the liability of an employer and mandates the employer to provide compensation to the employee if the employee suffers from an employment-related injury or death. Additionally, the Workmen Compensation Act 1923 also makes it the liability of an employer to provide compensation to the employee if the employee contracts occupational diseases during his/her employment.

Employer’s Legal Liability for accidents in the course of employment might arise out of any of the following reasons:

Negligence of the employer to use reasonable care in providing a safe working environment to the employees
Breach of Statutory Regulations with regards to safety of employees such as Factory Acts
Negligence of employees themselves while performing their duties

If an employee suffers a workplace related accident or injury (even death) for any of the above reasons, the employer can be held liable.

What are the Coverages under a Workmen's Compensation Insurance Policy?

A Worker’s Compensation Insurance Policy provides the following coverages:

Death
Accidental Injury resulting in Permanent Total Disability
Accidental Injury resulting in Permanent Partial Disability
Temporary Disability
Occupational Diseases contracted by the workman which is peculiar to that employment

What are the Add-On Covers under a Workmens Compensation Insurance Policy?

A Workmen's Compensation Insurance Policy offers the following add-on covers:

Medical Extension: If the Insurance Policy has a Medical Extension Add-On Cover and an Accident occurs, then the Medical Extension offered under the Workmen Compensation Insurance Policy pays for treatment expenses of any injury sustained by an employee at the work premises.

Occupational Diseases: Prolonged exposure to occupational hazards also results in Diseases and Illnesses specific to various industries. Diseases that can be covered under the Occupational Disease Add-On Cover of a Workmen Compensation Insuance Policy include Pneumoconiosis caused by sclerogenic mineral dust and silico-tuberculosis. Bagassosis, Bronchopulmonary diseases caused by cotton, flax hemp and sisal dust (Byssinosis), and Acute Pulmonary Oedema of High Altitude.

Sub-Contractors Cover: There are situations where a Contractor hires a Sub-Contractor to do a certain portion of the project work. In such cases, the Contractor can opt for the Sub-Contractors Add-On Cover. The Sub-Contractors Add-On Cover would provide coverage to the employees of the Sub-Contractors as well under the Workmen’s Compensation Insurance Policy.

What is the compensation amount payable under a Workmen's Compensation Insurance Policy?

The Compensation Amount payable under a WC Insurance Policy is as follows:

Disability	Claim amount under WC Policy
Accidental Death	50% of monthly wage * Age Factor (minimum of Rs1,20,000)
Permanent Total Disability	60% of monthly wage * Age Factor (minimum of Rs1,40,000)
Permanent Temporary Disability	% Loss of Earning Capacity based on nature of disability * Wages* Age Factor
Temporary (Total/Partial) Disability	Half monthly payment of 25% of monthly wages

What are Fatal and Non-Fatal accidents under Workmen Compensation?

If an Injury or Accident leads to the Death of the worker, then it is a Fatal Accident. If the Injury or Accident results in Permanent or Partial Physical Disablement such as Loss of Sight, Loss of Limb, then it is a Non-Fatal Accident.
Fatal Accidents Act 1855 is a Law that provides for the compensation of such losses which are covered under WC.

What is the Cost of a Workmen's Compensation Policy?

The premium for a WC Policy depends the riskiness of the business that the employer is operating in. The premium will be higher for a high risk business and lower for a less risky business.

Other factors which determine the Cost of a Workmen’s Compensation Insurance Policy are as follows:

Salaries of the Workmen
The Number of Workmen required to be covered and insured under the WC Policy
The Nature and Riskiness of the Workmen’s Job
Risk Location of the Company’s operations
Safety measures employed by the company
Prior Claims Experience of the business

What is the Cost of a Workmen's Compensation Policy?

Can a Claim be filed under both the WC Act and Common Law?

Yes, the WC policy covers both the Statutory Liabilities and Legal Liabilities. So a worker can file a claim either with the Workmen’s Compensation Commissioner or a Civil Court in respect of his injuries against the Employer.

What are the Exclusions under a Workmen's Compensation Policy?

A Workmen's Compensation Policy typically does not pay damages on account of the following:

Exclusions under a Workmen’s Compensation Policy

Only those employees that are workman as per the meaning of Law can be covered under this policy	If an Injury or Accident happens due to a Civil War, then it is not covered
If an Injury or Accident happens on account of Nuclear risks, Insurrection, Mutiny, then it is not covered	Any Liability arising out of the virtue of a specific agreement
Diseases mentioned in Part C of Workmen’s Compensation Act – 1923 unless specifically covered as an Add-On	Occupational diseases such as Allergies, Lung Diseases, Heart Disease are generally not covered