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Workmen's Compensation Insurance Policy

Employers are responsible for the safety of their employees. It is the duty of the employers to provide a safe and hygienic working environment for their employees so that they can discharge their duties without any adverse impact on their health.

Many Employees work in dangerous circumstances in the course of their job. Many times, things go wrong with the employee and an accident occurs resulting in Employees losing their lives or becoming permanently disabled. This results in the families of such workers facing financial distress. The government passed the Workmen’s Compensation Act, 1923 which makes it the liability of an employer to provide compensation to the family of employees if the employee has suffered from an injury or death in the workplace.

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:

  1. Negligence of the employer to use reasonable care in providing a safe working environment to the employees
  2. Breach of Statutory Regulations with regards to safety of employees such as Factory Acts
  3. 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:

  1. Death
  2. Accidental Injury resulting in Permanent Total Disability
  3. Accidental Injury resulting in Permanent Partial Disability
  4. Temporary Disability
  5. 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 are Fatal and Non-Fatal accidents under Workmen Compensation?

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.

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

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

How to make a Claim under a Workmens Compensation Policy?

Following Documents are Required to make a Claim under a Workmen’s Compensation Policy:

  • Duly Filled and Signed Claim Form
  • Copy of Wages Cum Attendance Register prior to Date of Accident at least for 6 months
  • Medical Papers, Medical Bills, X-Ray Report and any other documents relating to treatment
  • Declaration for Total Number of Employees present at the Time of Accident
  • Employers Sick Leave Certificate
  • Fitness Certificate from Attending Doctor
  • Grade/Category of Injured Employee
How to make a Claim under a Workmens Compensation Policy?
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Cover Against Death, Bodily Injury
Cover Against Death, Bodily Injury
Cover Against Permanent or Partial Disability
Cover Against Permanent or Partial Disability

Purchase a Workmen's Compensation Policy with Qian!

Qian is an experienced Insurance Broker for Workmen’s Compensation Insurance having served Corporate Clients across diverse industries over the years. We have assisted Small and Large Businesses for their Workmen’s Compensation needs.

You can avail of a FREE 1 hour Workmen’s Compensation Policy Consultation with the experts at Qian to ensure that you are availing of a Comprehensive Cover for your Employees. Contact us now at support@qian.co.in or 022-22044989 or fill this Contact Form. We will respond within 24 hours, guaranteed.

Purchase a Workmen's Compensation Policy with Qian!

FAQS

The Premium for a Workmen’s Compensation Policy depends on factors such as the Salary of Employees, Designation/Occupation and Number of Employees to be covered in the Policy.

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