What are the exceptions or exclusions in workmen compensation?
Employees are the backbone of any business. Irrespective of business size, it’s important to safeguard the health, safety and welfare of employees. Not taking proper care of employees and not compensating them in the event of mishaps may lead to litigations against the business. In order to eliminate the need for lawsuits and as a social security measure for employees, the Workmen Compensation Act, 1923 was enacted under the Ministry of Labour. The act aims to protect the employees by holding employers liable to compensate the employees and their dependant in the event of death or disablement caused by workplace accidents or illnesses.
Workmen Compensation Insurance and its coverage
Workmen compensation policy safeguards the employer against statutory liabilities to its employees in the event of workplace accidents or illnesses resulting in death or disablement to employees. The policy works on ‘no fault’ basis benefiting both employers and employees. The policy pays compensation to employees through employer as it is stated in the Workmen Compensation Act, 1923.
Workmen compensation insurance provides wider coverage. The policy is offered in two forms –
- Table A – table A policies offer coverage for company’s statutory liabilities to employees as per the terms of The Workmen Compensation Act, 1923 and any subsequent amendments to the said act before the policy issuance, the Fatal Accidents Act, 1855 and any subsequent amendments to the said Act before the policy issuance and the Common Law
- Table B – table B policies offer coverage for company’s statutory liabilities to employees as per the terms of the Fatal Accidents Act, 1855 and any subsequent amendments to the said Act before the policy issuance and the Common Law.
Coverage in workmen compensation policy is offered for following:
- Permanent total disablement
- Permanent partial disablement
- Temporary disablement
- Medical and legal expenses
Along with the main coverages, many workmen compensation policies offers extensions for occupational illnesses specified in Part C of Schedule III of the Workmen Compensation Act, 1923 and coverage for contractual employees’ etc. click here to know more on workmen compensation insurance as an employer.
Though the workmen compensation policy provides broader coverage, there are certain exclusions under the policy. Let’s take a detailed look into exclusions in workmen compensation policy
Exceptions or exclusions in workmen compensation policy
Following are the certain risks that are not covered under the workmen compensation policy –
- Injury due to war or nuclear perils
Any injury caused to employee in a workplace accident that is directly or indirectly attributable to war, act of foreign enemy, invasion, civil war, hostilities (whether war be declared or not), mutiny, rebellion, insurrection, revolution or military or usurped power, ionising radiations, nuclear weapons material or contamination by radioactivity from any nuclear fuel and wastage from the combustion of nuclear fuel are not covered under the workmen compensation policy.
- Occupational diseases
Occupational diseases that are stated in Part C of the Schedule III in the Workmen Compensation Act, 1923 are not covered. This includes diseases like Pneumoconiosis, silico-tuberculosis, bagassosis, bronchopulmonary diseases and acute pulmonary oedema of high altitude etc. however, this can be included in main policy through extensions in workmen compensation policies offered by some of the insurers.
- Contractual employees
A person employed in the business under a contractor or sub-contractor is not covered unless is specifically covered in the policy. However, such contractual employees can be covered through extensions in workmen compensation policies offered by some of the insurers.
- Injury due to terrorism
If the injury is caused to employee in a workplace accident that is a result of any terrorist activity in or near office premises, such injuries are not compensated for under the workmen compensation policy. However, businesses can separate insurance coverage to secure themselves against the damages caused by terrorism activities.
- Injuries outside the work location
Workmen compensation policy does not cover injuries suffered at any place other than the place of employment specified in the policy schedule. However, coverage is offered only if the employee was at such place while on duty for the purpose of business and on the directions of the employer.
- Injuries caused due to alcohol or drug abuse
Injuries caused to an employee in a workplace accident when employee was under the influence of alcohol or intoxicating drugs. Person can generally loose his control over body with the influence of alcohol or intoxicating drugs.
- Self-inflicted injuries
If the injury is caused to an employee by his deliberate attempt, intentional act, deliberate aggravation of an accidental injury, suicide or attempt to suicide etc. then the claims are not admissible under the workmen compensation policy.
- Compensation payable under agreement
In case the employer had promised employee to pay for certain injuries under an agreement, such compensations are not payable under the workmen compensation policy.
Apart from the acts that do not fall under the legal framework, employees are protected from all other risks during workplace mishaps. The workmen compensation policy provides employer the protection against all the statutory liabilities. However, it is important to note that employer is completely responsible for workmen welfare and safety. Along with implementing necessary safety measures at work, it’s essential for employer to have a right workmen compensation insurance coverage to safeguard against his statutory liabilities to employees during workplace mishaps. Employer needs to keep in mind all the exceptions or exclusions in the workmen compensation policy while making the buying decision. It’s also wise to compare various workmen compensation policies available in the market on cost benefit basis before zeroing down on the right policy. Click here to buy the right workmen compensation policy.