Labour Insurance

Labour insurance serves as a vital safety net for workers, offering financial compensation in the face of various employment-related risks. This comprehensive policy covers a spectrum of potential hazards including workplace injuries, illnesses, disabilities, and even fatalities. The core objective of a labour insurance policy is to ensure that workers receive essential benefits, including coverage for medical expenses, replacement income during periods of incapacity, and access to rehabilitation services.

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Why Do You Need Labour Insurance?

Here are some of the reasons why all employers should buy labour insurance cover for their employees:

  • Labour insurance provides financial support during workplace-related emergencies.
  • It offers a buffer against unexpected events, ensuring stability for workers.
  • Labour insurance is mandatory in many jurisdictions, ensuring adherence to legal requirements.
  • It demonstrates employer commitment to workers' welfare, fostering a positive work environment.
  • It contributes to social stability by supporting workers and their families during times of need.

What Does Labour Insurance Policy Cover?

The labour insurance scheme or WC policy provides coverage for the following:

  • Injury caused due to an accident during employment.
  • Partial and permanent disability
  • Temporary disability or fatality
  • Legal costs as well as expenses incurred with the company's consent

Labour Insurance Policy: Add-Ons

Below are the additional features available with the Labour insurance policy:

  • Subcontractor Cover: If a contractor engages a subcontractor who lacks employee compensation coverage, the contractor has the option to include subcontractor coverage as an add-on.
  • Medical Extension: Employers have the option to include a medical extension add-on. However, it is applicable only if a worker is hospitalized for more than 24 hours.
  • Terrorism Coverage: The Labour insurance policy offers an add-on for terrorism, providing coverage for losses or damages resulting from terrorist attacks.

What are the Exclusions under the Labour Insurance Policy?

The labour insurance scheme excludes coverage for the following conditions:

  • Non-fatal injuries
  • No coverage for the initial three days of disability if total disablement lasts less than 28 days
  • Injuries not resulting in partial disablement for more than three days
  • Accidents or injuries occurring under the influence of alcohol or drugs
  • Assumed liabilities under agreements by the insured
  • Employees not classified as workers under the Workmen's Compensation Act 1923 / Employees Compensation Act 1923
  • Diseases specified in part 'C' of the Workmen's Compensation Act, 1923
  • Changes made to the policy after its activation will not be covered

Labour Insurance Claim Process

To initiate a claim under the Workers' Compensation Insurance Policy, follow these steps:

  1. Notify the factory inspector immediately in the event of an accident at the manufacturing plant.
  2. The insured employer must then send a written notice to the insurance company regarding the disablement or death of the workman.
  3. The insurance company appoints a trained investigator to verify the authenticity of the claim.
  4. Gather all necessary information and documentary evidence as requested by the insurance company.
  5. If the Workmen's Compensation Commissioner issues any notices, promptly forward them to the insurer.
  6. Simultaneously, complete and submit a claim form along with the relevant documents.

Labour Insurance Policy: Required Documents

The documentation necessary for various types of claims under a Labour policy is outlined as follows:

For all types of claims:

  • Completed and signed claim form
  • Medical invoices
  • Compensation records

For permanent disablement claims:

  • Medical certificate pertaining to the disablement
  • Memorandum of agreement between the insured employer and the injured workman, as per the WC Act

For temporary disablement:

  • Medical certificate concerning the disablement

For fatal claims under a workers' compensation insurance policy:

  • Death certificate
  • FIR (First Information Report), if applicable
  • Copy of the postmortem report
  • Statements provided by witnesses, if available
  • Completed Form 'A' as per the Employees Compensation Act, 1923

Labour Insurance Policy Period

  • Minimum policy duration: 1 month
  • Maximum policy duration: 12 months

Note: A minimum of two employees is mandated, while the maximum count is subject to the insurer's terms.

Why Should You Purchase Labour Insurance Policy via Policybazaar for Business?

  • 365-Days Claim Assistance: With Policybazaar for Business, you get round-the-clock support throughout the year for any claim-related queries or assistance.
  • Plans from Top Insurers: Choose from a wide range of Labour Insurance policies from leading insurers in the industry.
  • Instant Policy Copy: With Policybazaar for Business, you can instantly access and download your policy copy as soon as your purchase is completed.

Labour Insurance Policy - FAQs

  • Que:1 What is the Labour insurance policy?

    Ans: A Labour insurance policy, also known as Workers' Compensation insurance, provides financial protection to workers in case of employment-related injuries, illnesses, disabilities, or fatalities. It ensures that workers receive compensation for medical expenses, lost wages, and rehabilitation services resulting from workplace incidents.
  • Que:2 What is the Insurance Act in Labour law?

    Ans: The insurance act in Labour law typically refers to the Employees' State Insurance (ESI) Act, which provides for social security and health insurance benefits to eligible employees and their dependents. It mandates employers to contribute to the Employees' State Insurance Corporation (ESIC) to fund the scheme.
  • Que:3 Who is eligible for ESI?

    Ans: Employees earning a salary of up to ₹21,000 per month are eligible for coverage under the Employees' State Insurance (ESI) scheme. This includes employees working in factories, shops, hotels, restaurants, and certain other establishments, as per the ESI Act, 1948.
  • Que:4 What is ESIC and its benefits??

    Ans: ESIC stands for Employees' State Insurance Corporation, which administers the Employees' State Insurance (ESI) Scheme in India. ESIC provides various benefits to insured employees, including medical care, cash benefits during sickness, maternity, disablement, and dependent benefits to eligible family members.
  • Que:5 Why is labour policy important in India?

    Ans: Labour insurance in India is crucial for protecting the rights and welfare of workers, ensuring fair employment practices, and promoting social justice and economic development. It establishes regulations for wages, working conditions, safety standards, and social security schemes to safeguard the interests of workers and promote harmonious industrial relations.
  • Que:6 What does the Labour Insurance Policy cover?

    Ans:Here are the labour insurance policy details (coverages):
    • Injury resulting from an accident while on the job
    • Partial or permanent disability
    • Temporary disability or death
    • Legal fees and expenses authorized by the company
  • Que:7 How do I apply for an online labour insurance policy?

    Ans: There are various platforms offering labour insurance policies online. However, for personalized assistance aligned with your specific insurance needs, you can consider consulting with a Policybazaar for Business expert. Our experts can assist you in navigating the available options and selecting the most suitable policy for your requirements.
Written By: PolicyBazaar - Updated: 28 May 2024

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