Workers' Compensation for Injured Workers

As an employer, you are responsible to provide a safe and healthy working environment. Workplace injury and worker compensation are considered huge liabilities for employers. Their well-being, safety, and health are keys to long-term success. Workers’ compensation ensures that the workers are sufficiently compensated if they sustain an injury at work. The Workers' Compensation for injured workers thus acts as a financial safety net during an emergency.

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What is the Workmen’s Compensation Act, 1923?

The Workmen’s Compensation Act, of 1923, is a central act wherein employers are liable to pay compensation to their workers or employees if the worker sustains partial or total disablement due to an accident on duty. It is now more commonly known as the Employee’s Compensation Act, of 1923. The amount of compensation is based on various factors namely, the age of the employee, the nature and severity of the injury and the average monthly salary or wages.

In case the worker loses his life due to the accident, the employer should pay the compensation amount to his dependent.

When do Employers Need to Pay Compensation?

The Workmen’s Compensation Act drafts in detail the situations of payment of workers’ compensation to injured workers. Under the below three conditions the employer shall pay compensation:

- If a worker suffers from an occupational disease that has resulted due to the injury caused by an accident at work. The occupational diseases are mentioned under Part A, B, and C of Schedule III.

- A worker sustaining an injury at work leading to a partial or total disability

- Death of an employee due to an occupational hazard

Calculation of Workers' Compensation for Injured Workers

Section 4 of the Act mentions the provisions for the calculation of the compensation amount payable by the employer. Also, it is to be noted that as per the new rule by the government, the wage considered for computing compensation under the Act is Rs 15,000.

1.  Accidents resulting in the death of a worker:

Claim Amount= Amount equal to 50% of the monthly wages of the deceased worker X the relevant factor

OR

Amount of Rs 1,20,000, whichever is more

2. Accidents resulting in permanent total disablement:

Claim Amount= Amount equal to 60% of the monthly wages of the injured worker X the relevant factor

OR

Amount of Rs 1,20,000, whichever is more.

Workmen Compensation Policy

Workmen’s Compensation insurance is the chief method by which an employer can establish his ability to fulfil the obligations imposed by the law, namely through the Workers Compensation Act.

Main Advantages of WC Policy are:

- It protects employees or workers financially if they have suffered any injury or illness at their workplace. It also helps them get back to their work

- Reduces financial losses of the business arising from medical support needed for the injured employees, and the costs of lawsuits

- Limits exposure to lawsuits, thus maintaining a positive brand image

- Helps keep business fulfil the statutory requirement and keep in line with the Workmen's Compensation Act, 1923

Check These Points before Getting a Workmen's Compensation Policy:

- Make sure all the safety and security precautions are taken care of

- Ensure your employees are aware of the safety process and are being followed by them

- Opt for an adequate Sum Insured for the worker compensation policy

- Be aware of the points that are not covered in the policy

Conclusion

When a worker suffers an injury, he may suffer various financial problems due to mounting medical bills. He may also be under pressure to get back to work as soon as possible. Workers’ compensation for injured workers offers excellent protection for the workforce and plays an essential role in a country’s economic growth.

Written By: PolicyBazaar - Updated: 07 November 2022