A worker was killed, and four others were injured when a mishap occurred at a private stainless-steel plant in Jaipur.
Irrespective of the type or size of your business, employees or workers are the real reason for your success. Therefore, providing a safe and a conducive working atmosphere to your employees is indispensable. However, one can’t deny the fact that accidents or injuries can happen at safe workplace also.
It means in case your worker gets injured during working hours, as an employer, it becomes necessary for you to provide compensation and other benefits. In certain cases, the injured worker or his/her family may also file legal claims. In order to protect your business from costly legal suits and hefty compensation amount, it is important to buy a workmen’s compensation insurance policy which is also called employers’ liability insurance.
This insurance policy becomes more important for companies with large labor forces or workers like business processing outsourcing, information technology, industrial units, etc. Monitored by the Ministry of Labour, the compensation amount paid to workers in India varies from one company to another.
When does an employer need to compensate the injured employee?
As per the Workmen’s Compensation Act (WCA), an employer requires compensating the employee if he/she gets injured while performing duties at work. Along with this, the act also makes it important to pay the compensation in case of disability.
Although assessing whether the employee was injured while discharging office duties is daunting, the WCA act has segmented the benefits as the following=
In the case of death of the worker, the immediate dependent of a worker becomes entitled to get compensation. Here the compensation paid is half the worker’s monthly wage multiplied by the factor which is decided on the basis of the employee’s potential income.
2. Permanent Total Disability
If due to an on-job injury, the worker can no longer perform duties, the employer has to compensate the injured worker accordingly. In most of the cases, the compensation paid is 60% of the monthly wage multiplied by the factor on the basis of the injured employees’ potential income.
3. Permanent Partial Disability
When an employee has sustained an injury, which makes it difficult for him/her to perform their role in the same capacity for the rest of their career, the employee becomes permanently partial disable. In this case, the compensation is paid by the employer on the basis of the nature of the injury and the employee’s loss of earning.
4. Temporary Disability
Those employees who sustain injuries that render them disabled for a temporary period are compensated for their temporary disability injuries.
What benefits are offered to workers under workmen’s compensation insurance policy?
A worker’s compensation system offers:
- Replacement income in case employees are off from work
- Payment for medical expenditure like surgeries, doctor’s visits, etc.
- Vocational rehabilitation benefits like providing job placement assistance, job training, etc.
What is not covered under a worker’s compensation cover?
Though the purpose of a worker’s compensation insurance is to give comprehensive cover, here are some of the events which are not covered by the insurance. Let’s have a look at the cases when an employee doesn’t get compensation under the Workmen Compensation Insurance Policy=
- Self-inflicted injuries
- Injuries caused due to intoxication
- Injury, an employee, suffers after the job
- Injuries that may happen due to a fight started by the employee
- Injuries that arise after the worker is terminated or laid off
How can an employer cover its liability under WC Act?
As WC Act makes it mandatory for an employer to pay compensation in case of workplace injuries, it is necessary for the company to buy a workplace insurance cover to get legal liability coverage against unforeseen events like accidents or disability.
A workmen compensation insurance policy offers the following types of coverages –
- Table A: Indemnity against legal liability that may arise due to accidents of employees as per the Workmen’s Compensation Act, 1923 and the Fatal Accident Act 1855.
- Table B: It covers indemnity against legal liability under the Fatal Accident Act 1855.
The cost of workplace injury is massive, and by purchasing a workmen compensation insurance policy, the employer can secure itself from hefty claim amount. It means, the employer doesn’t have to pay compensation in case legal case is taken up by the injured employee or their family against them.
Buying a Workmen’s Compensation Policy is beneficial for both employees and employers. While employees do not need to pursue employers’ or file a legal case to get compensation for injuries and on the other hand, employers get legal liability coverage as they don’t need to pay the compensation from their pocket at the time of the accident.
Overall, it is a win-win situation for both the employee and employer.
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