How much does it cost to get worker’s compensation insurance?

Providing safety at work is an important responsibility of any employer or organisation. In case a worker gets injured or suffers an accident while on duty, the employer becomes legally responsible for the loss or injury caused to the worker as per the Employee’s Compensation Act, 1923, The Fatal Accidents Act, 1855 and Common Law. For the employer, workers compensation policy is the primary way to avail of protection against this statutory liability. Workmen compensation policy is also termed as an employer’s liability insurance.

Generally, the cost of a workmen compensation policy will amount up to 1% of the total annual wages paid to workers. The Insurance Bureau of India (IIB) has valuations, based on which workmen compensation insurance premiums are determined. There are various factors that decide the cost of workmen compensation insurance.

The following are the factors on which workmen compensation insurance rates are determined

  •       Type of coverage: There are two types of covers offered under workmen compensation policy– table A and table B cover. The premium is determined depending on the type of coverage chosen by you.
  •       Nature of business: Business nature or the degree of risk involved in the type of work carried out by your business also decides the workmen compensation insurance rates. If the business is categorised as a high-risk business, such as construction, that involves physically demanding work, then the premium that needs to be paid for workmen compensation is higher and vice versa.
  •       Size of the business and annual payroll: The amount of premium also depends on the number of workmen to be covered. Usually, a bigger business with many workers employed, would need to pay more in comparison to a smaller business of similar type. The more the number of workers, the greater is the amount of total payroll – which leads to higher workmen compensation insurance premia in comparison to smaller businesses with lower number of employees and annual payroll.
  •       Industry type: Number of workplace accidents at an industry level is also considered while estimating the risk by the insurance companies. If your business belongs to an industry with high risk and with a history of more workmen accident cases or occupational illnesses, you would be charged higher workmen compensation insurance premium.
  •       Previous claim history: Premium for workmen compensation insurance also depends on the previous claims made by the business. In case of greater numbers of claims in your history, you would have to pay higher workmen compensation insurance rates. Nil or lesser number of claims indicates successful work safety measures taken at the workplace. With a safer work environment, you will be charged a relatively lesser premium.

Additional Read: Does the premium of workmen compensation policy changes every year?

Hence, coverages chosen, the type of business, size, claim history and the industry you belong to will have a major influence on your workmen compensation insurance rates. You can compare various plans based on benefits and quotes using the workmen compensation insurance premium calculator while choosing the best one for your workers.

No votes yet.
Please wait...