Are there any value-added services in workmen compensation?

Are there any value-added services in workmen compensation?

Employee welfare is crucial for every business for its smooth run and growth. Protecting the employee’s health and welfare mutually benefits both employer and employees. It’s a legal responsibility of every employer to protect employees’ health, safety and wealth. In case, employee gets hurt o injured in the workplace accident arising out of or during the course of employment, employer is liable to compensate for the loss as per the Workmen Compensation Act, 1923. The primary and effective way to be complied with legal obligations is to avail workmen compensation policy.

What is workmen compensation policy? What does it cover?

Workmen compensation policy is an insurance programme that secures employer from legal liabilities to its employees in case employees suffer injuries or dies in a workplace accident or an illness arising out of or during the course of employment. Click here to know more on how employer’s liability is decided.

To qualify for workmen compensation benefits, one must be an employee of employer who has workmen compensation insurance and the employee has suffered an injury at work or any job-related illness. Workmen compensation is a no fault insurance system. The policy usually comes in two forms –

  • Table A – The policy indemnifies the employer against legal liability to all employees under the Workmen Compensation Act, 1923 and subsequent amendments to the said act before policy issuance, the Fatal Accidents Act, 1855 and at Common Law.
  • Table B – The policy indemnifies the employer against legal liabilities to employees as under the Fatal Accidents Act, 1855 and Common Law. These policies are usually not issued to cover employees who do not come under the definition of ‘workmen’ in the Workmen Compensation Act, 1923.

Following are the coverages mainly offered under the workmen compensation policy

  • Death: In case employee dies in a workplace accident or due to an illness arising out of or during the course of employment, dependants of diseased employee will be compensated under the workmen compensation policy for the income loss. Compensation under the policy is payable as per the terms of the Workmen Compensation Act, 1923. 

Compensation payable will be higher of INR. 1, 20,000 or 50% of monthly wages X relevant factor (age based) stated in Schedule IV of the Workmen Compensation Act, 1923. (Compensation is subjected to change depending on the amendments into the act)

  • Permanent total disablement: In case, an injury caused to an employee due to workplace accident or illness arising out of or during the course of employment makes the employee completely disabled to perform any kind of job for lifetime, then the workmen compensation policy offers protection to employee. Compensation will be paid to disabled employee as a replacement income. 

Compensation payable as per the terms of the Workmen’s Compensation Act, 1923, is higher of INR. 1, 40,000 or 60% of monthly wages X relevant factor (based on age) stated in Schedule IV of the said act. These stated compensations are subjected to change.

  • Permanent partial disablement: In case, an injury caused to an employee due to workplace accident or illness arising out of or during the course of employment makes the employee from performing job at full capacity after recovery but he/she can perform modified or lower paying jobs, then the policy compensates for loss of income. 

Compensation payable will be decided based on the extent of impairment. Calculation of compensation payable is similar to that of permanent total disablement. But, benefits are paid on pro-rata basis depending on the extent of disability.

  • Temporary disablement (total or partial): In case, an injury caused to an employee due to workplace accident or illness arising out of or during the course of employment makes the employee temporarily disabled to perform job, then the policy pays for loss of income and for cost of retraining after recovery. 

As per the terms of the Workmen’s Compensation Act, 1923, 25% of the monthly wages is payable as compensation on half monthly basis.

However, workmen compensation policy also offers extensions to avail the additional coverage. These add-ons can be availed at an additional cost of premium.

  • Medical expenses cover: Under this, medical expenses incurred on hospitalisation or for surgical treatments of an injured employee is covered.
  • Cover for legal cost: under this, legal expenses incurred by employer relating to workmen compensation claims are covered.
  • Contractual employees: Employees who are working under contractor and sub-contractor are usually excluded from the main workmen compensation policy. Contractual employees cover extends protection for employees who work under contractor.
  • Occupational diseases: Illnesses that are listed under part ‘C’ of Schedule III of the Workmen Compensation Act, 1923 such as pneumoconiosis, bagassosis, silico tuberculosis, bronchopulmonary diseases and extrinsic allergy etc. are not covered under the main workmen compensation policy. Hence, this extension offers coverage for occupational illness listed in part ‘C’. 

For example, let’s a person is employed in coal mining firm. If he contracts coal worker’s pneumoconiosis by inhaling coal dust, compensation will be paid workmen compensation policy only if occupational diseases extension is availed. 

Theses value added features of the workmen compensation policy enhances the coverage offered under the standard plan. Depending on the industry type, nature of business and risk exposure, employers can include these extension or value added features to the main workmen compensation policy to avail extensive coverage. Having a robust workmen compensation policy is the need of an hour for every employer in this dynamic market environment. Click here to avail the right workmen compensation policy.

 

 

 

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