Is Workers (or Employee) Compensation limited to Specific Industries only?

Every employer does their best to ensure workplace safety. Still, accidents do happen at the worksites or offices where the employees can get severely injured. If you run a business unit in India, you must be aware of your legal responsibility to make the workplace safe for your business activities. To protect yourself from lawsuits resulting from workplace accidents, you must buy worker’s compensation insurance. 

Unsure if you need it for your specific type of business?

Many business owners think there is no need to buy worker’s compensation (or employees’ compensation) insurance, and they can take care of the rare mishap as and when it might occur. Surprisingly, some of them do not even know what a WC policy is. As a result of a lack of awareness, they end up bearing significant financial losses resulting from lawsuits related to workplace accidents.  

If you have recently started your business, you need to know why buying worker’s compensation insurance is a must, irrespective of your industry. Here are some common questions you may want to ask about this insurance policy before buying one:


  • What kind of businesses need worker’s compensation?


There is always a risk of workplace accidents in any kind of business, no matter whether you run a tech company or are involved in the construction of buildings. Therefore, you need to buy workers’ compensation insurance for your business. Similarly, the size or strength of your business does not matter. Whether you run a small business or a big established organization, you must buy this policy. 

The reasons to buy this insurance can be different based on the risk factors associated with each industry. For instance, if your business involves labor-intensive activities, such as construction or mining, the risk of a worksite accident or mishap is considerably high. On the other hand, if yours is an IT company, you need to buy WC policy as per basic legal or contractual requirements as well as to minimize the risk of certain different types of mishaps.


  • What Makes It Legally Necessary for You to buy WC or EC Policy?


Wondering what a WC policy or EC policy is,  and which law or act you have to buy this policy under?

The act is the Workmen’s Compensation Act, 1923. This Act aims to offer compensation to the workmen or employees in case of an accident arising out of employment activities. Furthermore, if an employee suffers from an occupational disease, the employer will be held liable for the same and have to pay compensation. 

This Act makes it important for every employer in India to know what a WC policy is and buy it too. 


  • What You Will Get on Buying a WC (EC) Policy?


Buying a workmen compensation policy comes with several advantages for you, such as:

  • Coverage for medical expenses arising from accidents caused during employment
  • Legal liability coverage related to a workplace accident
  • Occupational disease coverage, which varies from one industry to the other
  • Statutory liability cover in case of a workman’s death 
  • Tax benefits on the WC / EC policy premium paid


  • Can an Employee Sue You Because of a Workplace Injury?


You might have thought you have full control over the events in your workplace. You must know that as per the Worker’s Compensation Act, any of your employees can sue you for severe injuries caused to them in case of a workplace accident. If you do not have workmen compensation insurance, you would have to pay for the compensation and the legal costs involved. However, you can avoid paying for all this by buying a WC policy. 

As detailed above, buying a WC policy is not limited to some specific industries only, but is required for all businesses. It is crucial that you gain knowledge about what a WC policy is before buying one. 

Contact us for a seamless experience of buying the best-suited worker’s compensation insurance policy for your needs.

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