Providing safety at work is an important responsibility of any employer or organization. In case of a worker suffers from injuries or accidents while on duty, the employer becomes legally responsible to compensate the wage loss. The policy also covers medical expenses arising out of injuries caused to the worker as per the Employee’s Compensation Act, 1923, The Fatal Accidents Act, 1855, and Common Law.
For the employer, a workers’ compensation policy is the primary way to get protection against this statutory liability. Workmen’s compensation policy is also termed as an employer’s liability insurance. It entails a wide scope of coverage for the insured organization.
Cost of workmen compensation policy
Generally, the cost of a workmen’s compensation policy will amount to up to 1% of the total annual wages paid to workers. The Insurance Bureau of India (IIB) has valuations, based on which workmen’s compensation insurance premiums are determined. However, these are indicative and prices can vary based on specific circumstances.
Factors determining workmen’s compensation insurance rates
Type of coverage:
Workmen’s compensation policy provides two types of coverage. Table A covers the Workmen’s Compensation Act, 1923, Fatal Accidents Act, 1855 and Common Law. However, Table B covers only the Fatal Accidents Act, 1855 and Common Law. The coverage determines the premium.
Nature of business:
The insurance rates depend upon the nature of the organization and its main activities. The degree of risks of businesses engaged in different industries varies. However, this is an important determinant in assessing the cost of the policy. Some work is concerned relatively riskier. A high-risk business engaged in construction or mining has to pay a higher premium than a business engaged in IT.
Size of the business and annual payroll:
The premium amount is based on the number of workmen employed in a company. A bigger business with many employees is required to pay more in comparison to a smaller business of a similar type. The premium for business increases with the increase in the number of workers in the company. However, although the absolute premium increases the premium per worker may decrease as the scale increases. The insurance risk is spread across a larger number of persons.
Industry claims track record:
Insurance companies estimate risks associated with insuring a company by considering the number of workplace accidents at an industry level. Higher the industry risks and history of workmen accident claims in the past, the higher the insurance premium.
Previous claim history for that company:
The premium for workmen’s compensation insurance also depends on the previous claims made by the business. The cost would be higher for worker’s compensation insurance if there is greater claim history in the past. Nil or lesser number of claims indicates adequate work safety measures taken at the workplace. Charged relatively lesser premium for buyers with a safe work environment.
How to buy the best WC Policy with affordable premium rates
Workmen’s compensation insurance rates depend on the coverage chosen, business type, size, claim history and the industry of policy buyers. You can compare insurance plans online for benefits and premiums using the workmen compensation insurance premium calculator hence choosing the best protection for your workers.
Additional Read: Does the premium of workmen compensation policy changes every year?
About The Author
Rahul Kumar
MBA Finance
With a wealth of experience in the insurance industry, Rahul is a seasoned writer specializing in articles related to workmen compensation policies (WC policies) for SecureNow. With 12 years of experience in the field, he has acquired in-depth knowledge and expertise in workmen compensation insurance, understanding its complexities and nuances. Their insightful articles provide valuable insights into the importance of WC policies for businesses and employees alike, offering practical advice and guidance on navigating the intricacies of insurance coverage. Trust him to deliver informative and engaging content, backed by years of experience and a passion for educating readers about insurance-related topics.
