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Workmen’s Compensation Insurance

The Workmen’s Compensation Act of India was passed in 1923 and has ever since been monitoring the employer’s liability to pay for any injuries suffered by an employee during the course of business activities. Since businesses are mandated by the Act to compensate workers or their families for any injuries suffered, it is a financial burden which every business entity has. A Workmen’s Compensation Insurance policy comes to rescue of business entities in taking over this financial burden. The insurance policy covers the legal liability of an organization to pay for the death of its employees or for any injuries suffered if it happens during the regular course of business.

Coverage features present in a Workmen’s Compensation Insurance policy

A Workmen’s Compensation Insurance plan provides the following basic coverage features to organizations –

  • Any bodily injury suffered by an employee due to an accident during the course of employment
  • Any bodily injury suffered by an employee due to diseases which are due to the nature of employment. Moreover, if the employee already suffers from a disease which is aggravated by the nature of his employment, any injury sustained subsequently would also be covered.
  • Death of the employee
  • Temporary disablement
  • Permanent total disablement
  • Permanent partial disablement
  • Any type of legal costs or expenses incurred if such costs are agreed to by the insurance company

Besides these standard coverage features, there are additional features present in a Workmen’s Compensation Insurance policy too. These features are available at the payment of an additional premium and vary from plan to plan. Some common add-ons which are available for contractor employees include the following:

  • Coverage for tariff rate based on the aggregate amount of contract provided the contract is for labor only
  • If, on the contrary, the contract is for both labor and materials, the value of labor would be decided on merit. However, the minimum value of labor would be 75% of the amount of contract.

Eligible proposers

An employer, whether he is a principal employer or a contractor, can opt for this policy if the employer engages ‘workmen’ for business. The definition of ‘workmen’ can be found in the Workmen’s Compensation Act. Moreover, employees who are not qualified ‘workmen’ can also buy the policy but they would be covered under a separate table.

Exclusions in Workmen’s Compensation Insurance policy

There are exclusions which are applicable in Workmen ’s Compensation Insurance policy. These exclusions include the following:

  • Injuries which do not result in death or partial disablement within a period of 3 days
  • A non-fatal injury caused by an accident due to willful removal or disregard of a safety device, alcohol or drug abuse, willful disobedience of an order which would have ensured safety of the workman.
  • The first 3 days of disablement are excluded if the disablement lasts for less than 28 days
  • Perils related to wars and nuclear activities
  • Compensation for diseases which are mentioned in Part C of the Workmen’s Compensation Act.

A Workmen’s Compensation Insurance policy is necessary both for legal reasons and for taking care of the company’s finances in case of any untoward contingency. Thus, it is an essential coverage which should be taken by businesses. Paybima helps businesses to avail the policy through an online easy channel. You can compare before buying and buy the policy with minimal paperwork. So, buy a Workmen’s Compensation Insurance policy for your business without delay.