When it comes to employee benefits, the classification of employees based on their titles plays a major role. The subject has become even more complex recently with remote working being an integral part of a work environment.Independent contractors and workers’ compensation in most cases do not go hand in hand. Simply put, independent contractors are not eligible to receive workers’
Classification between Independent Contractors and Employees
To understand who is eligible to receive workers’ compensation and who is not, let us first understand the basic classification of workers. Typically, there are two types of workers who exist in an organization - full-time employees and independent contract-based employees like freelancers, consultants, etc. The difference between these two types goes beyond the mere title these employees hold.
Full-time employees of an organization are eligible for numerous benefits such as health benefits, pensions, leaves, etc. Along with the multiple benefits offered by the employer to its full-time employee, they are also eligible for workers’ compensation in case of an injury at the workplace. These benefits are usually not offered to contractual workers.
When it comes to independent contractors and workman compensation policy, they are not eligible for the same. As mentioned above, independent contractors are not eligible to receive benefits from employers until specified by the employer himself. Workers’ compensation is a part of an employee benefits program that refrains contractual workers to be a part of the same.
Workers Compensation Insurance
With the Workmen’s Compensation Act 1923, becoming a statutory obligation of the employer, Workers' Compensation Insurance came into being. This type of commercial insurance policy is also sometimes referred to as a workmen compensation policy or employee compensation policy.
This policy ensures that the frontline workers are adequately compensated for injuries caused on duty. Employees who are injured or disabled on the job are entitled to receive workers’ compensation. In case of the demise of the worker, the dependents are eligible to receive compensation. The compensation amount depends on various factors.
Workman’s comp insurance policy compensates employees if they are injured at the workplace. It also helps employers to cover legal costs if the employee presses any charges against the employer.
In the above content, we have understood who are considered independent contractors, their standing in workers’ compensation, and the meaning of workers’ compensation insurance. It's time to put all these pieces together and know if contractual workers can be covered under workers’ compensation insurance.
Most of the policies do not cover independent contractors under Workers Compensation insurance unless these workers are separately covered or any declaration is made. However, if an independent contractor is injured or disabled on the job, he has the right to press charges against the employer and take him to the court. If it is proved that the injury sustained is due to the carelessness or negligence of the employer, the employer will have to pay for the damages.
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Conclusion
Insurance is a risk mitigation tool. In the case of workers comp, insurance acts as financial support for the employer. Since independent contractors are not covered under this insurance type, it is always a favourable decision to take up personal insurance policies to cover oneself from unprecedented losses. Also, if you are an independent contractor who employs other workers, buying a workmen's compensation policy for them should be considered as well.
Disclaimer: Above mentioned insurers are arranged in alphabetical order. Policybazaar.com does not endorse, rate, or recommend any particular insurer or insurance product offered by an insurer.
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Lucknow
4 June 18, 2023
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3.8 June 08, 2023
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4 May 21, 2023
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I recently bought Workmen Compensation Plan at policybazaar website which provides comprehensive coverage giving me peace of mind knowing that my employees are well protected in case of any unfortunate event.Thanks.
Pune
3.8 May 16, 2023
Vishal
Helpful Representatives
The team at PolicyBazaar were responsive, courteous, and extremely knowledgeable. I had a few questions regarding the coverage terms and the representatives were patient in addressing all my queries. Thanks.
Coimbatore
4 May 11, 2023
Aditya
Good Platformm
When it came to selcting the right Workmen Compensation Insurance, Policybazaar offered an impressive range of options from reputable insurers. I appreciated the comprehensive details avalable for each policy which helped me to take the better decisions. Thankyou.
Chennai
3.8 May 06, 2023
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Well Informed
I recently purchased Workmen Insurance plan from PolicyBazaar. The process was straightforward and I felt well-informed throughout, thanks to the clear and concise information provided.
Delhi
4.3 May 01, 2023
Abhiraj
Good Decision
I am absolutely delighted with the Workmen Compensation Insurance policy I purchased through Policybazaar. From start to finish, the entire experience has been nothing short of exceptional. I can confidently say that this is one of the best decisions I have made for my business.
Mumbai
3.8 April 30, 2023
Anam
Instant Protection Against Accidental Misshappening
I bought Workmen Compensation Plan from the Policy bazaar website online for our workers in my industry to get protetion aganst any Accidental miss happening caused to them. It offers amazing deals which provide them with medical coverage and help me to get instant protection against any loss. Thanks, PolicyBazaar.
*All savings and online discounts are provided by insurers as per IRDAI approved insurance plans. Premium varies on the basis of Occupancy, Business Activity & Coverage Type By clicking on "View Plans" you agree to our Privacy Policy and Terms Of Use and also provide us a formal mandate to represent you to the insurer and communicate to you the grant of a cover. The details of insurance coverage, inclusions and exclusions are subject to change as per solutions offered by insurance providers. The content has been curated based on the general practices in the industry. Policybazaar is not responsible for the factual correctness of these details.
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