Important Aspects Related to Workers’ Compensation Insurance

Workers’ Compensation Insurance policy, also known as Employee Compensation Insurance Policy, is an insurance policy that is dedicated towards both the employee and the employer. It safeguards the employee of the company from any workplace injury or death during their job. Workmen Compensation Insurance is one of the most effective ways to solve this kind of problem and mandatory in India as well as most of the countries in the world.

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Let’s skim through this article to know more about Workers’ Compensation Insurance.

What’s the Workers’ Compensation Act, 1923?

The Workers’ Compensation Act was introduced in 1923 in India. It is among the earliest security legislations in India that enacts with the purpose of making the employer liable to pay compensation to his/her employees who get injured or die while performing their duties.

The compensation paid by the employer depends on several factors like the age of the workmen, average monthly salary, nature of the injury or the wages paid to them. However, the compensation rate is fixed for death and disability, subject to timely revision.

Indian Ministry of Labour and Employment in India has constituted the ‘Social Security Division’, which is responsible for framing social security policies for the workmen and also ensures its implementation. It enforces the Workers’ Compensation Act in India.

Importance of Workers’ Compensation Insurance for Employees

The importance of Workers’ Compensation insurance for employees is that it aims to protect the employee and the dependents in case of any mishappening in the workplace that leads to his/her death or any permanent injury while performing his/her duties. It bears the cost of treatment by covering the cause for permanent disablement or death during the course of employment.

The employee is eligible for the benefits of the Workers Compensation, most of the time regardless of the fact that it was the employees fault. For example: If an employee of a wood cutter factory is sliding the wood blocks into the cutter and doesn’t take precaution by wearing cut-resistant gloves, the person will still get the benefits under this insurance policy.

Every state has different rules in terms of benefits covered under the Workers’ Compensation Insurance Policy, which are determined by the laws of the state.

Main Purposes of Workers’ Compensation Insurance Policy

Moving on to the purposes of this insurance policy, the Worker’s Compensation Insurance makes sure that the employee gets the quality medical care. It also compensates for a portion of the income they lose while they are not able to return to work. In case of sudden demise of the employee, the policy pays death benefits to the family. It also protects the employer from any lawsuit that might rise in the process. 

Inclusions & Exclusions under the Policy

The workers’ compensation insurance policy covers various situations that may lead to medical attention are as follows:

  • Bodily injury while performing the duty
  • Death benefits can be received by dependents
  • Disability due the severe injury
  • Legal costs and expenses incurred with the company’s consent

There are some common exclusions, which are not covered under the policy are as follows:

  • All the injuries that do not cause partial disability for more than 3 days
  • Accident or injury caused under the influence of alcohol or drug
  • Any psychiatric disease
  • Non-fatal injuries
  • Employees who are not considered as workmen as per the ‘Workmen’s Compensation Act’
  • The diseases that are specified in part ‘C’ of ‘Workmen’s Compensation Act’
  • Any amendment made in the ‘Workmen’s Compensation Act’

Documents Required for the Claim Process

The documents required for a quick and easy approval of the workmen’s compensation insurance are as follows:

  • Properly filled in claim form
  • Statement provided by the injury
  • Medical bills, in case of injury
  • Death certificate if the employee dies
  • Post-mortem report, if the employee dies
  • Compensation records for previous claims, if any
  • Medical certificate, in case of permanent disability
  • Memorandum agreement according to the Workmen’s Compensation Act, 1923 

How the Workers’ Compensation Insurance is Beneficial for the Employer?

This insurance policy is as much important for an employer as it is for the employee. It helps the employer to avoid the extra expenses incurred in case any worker meets an accident and sustain any kind of fatal injury. In this case the insurance policy bears the cost incurred in the treatment on behalf of the employer.

The employer is liable to pay compensation in case of death, permanent total or partial disability and/or temporary disability. However, the employer would not need to pay any compensation in case of the death or disability caused under the influence of alcohol, drugs or other intoxicating substances. Employer is also not liable to pay if the employee willfully disobeys the safety measures and security rules. By covering the legal liabilities, the policy also benefits the employers from paying a huge penalty. 

How to Get Insured with the Workers’ Compensation Insurance Policy Online? 

In this digital era, everything can be done online. Insurance is no exception. Almost all insurance companies offer their products online, including the ‘Workers’ Compensation Insurance’ plan. However, with plenty of options available in the market, it is quite obvious for you to get confused. So, if you plan on buying the Workers’ Compensation Insurance, you can approach a web aggregator for comparing different Employee Compensation Insurance and get the best deal for yourself. 

To Conclusion!

It is always a better choice, whether an employer or an employee to opt for Workers’ Compensation Insurance Policy. Therefore, it is better to protect your employees from any sudden deadly injury that could cost his/her life or make them physically disabled. So, if you’re not insured then without wasting your time, contact a reliable agent to find out which Workers’ Insurance Policy will be perfect for you.

Written By: PolicyBazaar - Updated: 03 August 2022