Workmen/Workers Compensation Insurance

What is Workmen Compensation Insurance?

A Workmen Compensation insurance policy is a commercial insurance policy that covers the legal liability of an employer to provide compensation to its workmen in case of their death or accident. Also known as employee compensation insurance, this insurance enables an employer to demonstrate his ability to meet the obligations imposed by the Workmen Compensation Act.

Workmen/Workers Compensation Act in India

The Workmen Compensation Act, 1923 is an employee compensation act that mandates certain classes of employers to pay compensation to their employees or workmen for an accident or injury. The act enables workmen and their dependents to get compensation from their employers in case an accident or injury caused at work or due to the nature of the work results in their death or disability. It also mandates employers to pay compensation to their workmen if they end up contracting certain occupational diseases related to that employment.

The Act covers people working in factories, plantations, mines, construction works, mechanically propelled vehicles and other kinds of hazardous activities. It also includes railway employees as well as people employed in any such capacity.

The compensation to be paid by the employer depends on the age of the workmen, nature of his injury and the average monthly salary or wages paid to him. However, the minimum and the maximum compensation rate is fixed for death and disability, subject to timely revisions. In case of the death of the workmen, the employer is supposed to pay the compensation to the dependents of that workmen.

The Ministry of Labour & Employment in India has constituted the ‘Social Security Division’ which is responsible for framing social security policies for the workmen and ensuring its implementation. It is also responsible for enforcing the workmen compensation Act in India. However, the various state governments administer the Act through Workmen’s Compensation Commissioners.

Why Do You Need Workmen Compensation?

Here are some of the reasons why all employers should buy a workmen compensation insurance policy:

• To pay the compensation that the insured employer is legally liable to pay his employees and their dependents due to the death or personal injury caused by accidents or diseases contracted due to the work and during the course of the employment.
• To fulfil the insured employer's liability arising either under the common law or under the laws mentioned in the Workmen Compensation Act, 1923.
• To cover the costs or expenses incurred by the insured employer with the consent of the insurance company to defend any additional claims.

What does Workmen Compensation Policy cover?

The Workmen Compensation covers:

• Bodily injury caused by accident during the course and scope of employment.
• Bodily injury caused by disease or aggravated by the conditions of the employment.
• Death or temporary disablement
• Permanent total or partial disablement
• Legal costs and expenses incurred with the company's consent

Add-on Covers in Workmen Compensation Policy

Contractor employees by charging additional premium can get coverage for:

• Tariff rate on total contract amount, if the contract is for workers only
• If the contract is for workers and materials, workers value will be decided as per merits, subject to a minimum of 75% of the contract amount.

Exclusions in Workmen Compensation Policy

The common exclusions of most of the workmen compensation insurance policies are:

• Non-fatal injuries
• The initial 3 days of disablement and the total disablement is lesser than 28 days.
• All the injuries that do not cause partial disablement for more than 3 days.
• Injuries caused due to war, nuclear, or riot.
• Injuries caused to the internal removal of the security device or due to the carelessness of the security device.
• Accident or injury caused under the influence of alcohol or drug.
• Liabilities faced for the employees of contractors.
• All the liabilities assumed in an agreement.
• The employees who are not considered as workmen as per ‘Workmen’s Compensation Act’.
• All the diseases that are specified in part ‘C’ of ‘Workmen’s Compensation Act’.
• Any changes made in the statute of the provisions after the commencement of the policy.

How to Find Best Workmen Compensation Policy Online

There are various insurance companies that offer ‘Workmen Compensation Insurance' plans online and one may get confused in selecting the most suitable policy. Moreover, the workmen compensation insurance also needs jurisdiction that comes in the business area of the prospect.

However, if one takes the help of an insurance web aggregator for comparing different workmen compensation insurance plans, he/she can get the best and most suitable option. A reliable web aggregator asks certain questions to the prospect and shows the result based on these them. In this way, one can find the best workmen compensation plan for his/her business.

Claim Process for Workmen Compensation Insurance Policy

The steps to file the claim for workmen compensation insurance are:

• The employer must immediately be informed about the death or disablement of the employee.
• If the accident happens in the manufacturing plant, then intimate immediately to the factory inspector.
• The employer must gather all the information and documents as per the requirements of the insurance provider.
• Then the employer should deposit all these documents to the insurance provider.
• The insurer denies or approves the claim and informs the employee about the same.

Required Documents for Workmen Compensation Policy

• For all types of claims:
  • Duly filled and signed claim form.
  • Medical bills.
  • Compensation records.
• For permanent disablement claims:
  • Medical certificate related to disablement.
  • Memorandum of agreement according to the Workmen Compensation Act between the insured (employer) and workmen who is injured.
• For temporary disablement:
  • Medical bills.
  • Medical certificate related to the disablement.
• In case of fatal claims:
  • Death certificate.
  • Final investigation report.
  • A copy of the postmortem report.
  • The statement given by witnesses, if any.
  • Form A given by Workmen Compensation Act filled by the insured.

Workmen Compensation Policy- FAQs