Group Personal Accident

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For the purpose of workmen compensation insurance policy, an employer shall be defined as follows:

  1. A group of individuals who may or may not be incorporated,
  2. Any managing agent of an employer. Here Managing Agent means any individual who has been appointed to represent another person for the sole purpose of carrying out that other person’s trade or business. This does not include a subordinate to an Employer or an individual manager. This simply means a person who is acting on behalf of another person so that the other person’s orders/directives to the worker are being expressed.
  • A legal representative of an already demised employer.
  1. A workman’s services have been contracted, lent or let on hire to a third party, that third party is regarded as the employer of that workman for as long as he stays under his contractual employment and is being paid a salary/wage as compensation for his services.

Simply put, an employer can be an individual or a legal entity who has control over or directs a worker or a servant as per a contractual employment agreement or implied agreement between both parties and who disburse salaries or wages as compensation to the worker/servant.

Read More: What is covered under Workmen Compensation Insurance Policy?

Employers can be anyone ranging from someone giving the services of a babysitter to governmental bodies and companies which have hundreds of employees. Governmental bodies are considered to be the largest employers, but small and medium businesses in the private sectors have most of the workforce in employment.

Case: 1

 After working for a decade in the corporate sector, Rajan Saran started his own manufacturing unit in 2013. It was the result of hard work and diligence of Rajan that within four years of its inception, the company has made an impressive client base. The company which was started with only one person is now employing 120 employees.

Though Rajan has implemented all the safety measures in his manufacturing unit, as an employer, it is necessary for him to buy a workmen compensation insurance policy as well.

Many times, accidents happen even at the safe locations, and therefore, if God forbid, any of its employees get injured at a workplace, Rajan will have to pay compensation and deal with medical expenses on its own.

To avoid this, it is essential for Rajan to purchase a worker’s compensation insurance policy which will offer legal liability coverage to him. It means, if any of Rajan’s employees are injured during working hours, the worker compensation insurer will come forward and pay compensation and medical expenses to the worker.

It will save Rajan from bearing the financial brunt that may arise in the case of accident or injury of his employee.

Case: 2

The last year was tough for AKJ Electronics as it lost his founder Mr. Vijayprakash who died at the age of 75 due to a heart attack.

Lt. Vijayprakash had two sons— the elder son, Kapil was helping him in the business and the other son, Jeet was studying in college. After the death of Vijayprakash, Kapil became the full-time owner of AKJ Electronics as per the will of Vijayprakash.

Kapil had followed global safety norms at the workplace and built a separate department whose main task was to train employees on safety practice.

Read More: What Is the Purpose of Workmen’s Compensation?

As Kapil was the new CEO (as per the will of Vijayprakash), he also bought a workmen compensation insurance policy to cover his legal liability which could arise due to the injury of its employee during the working hours.

A few days ago, one worker suffered major hand injuries when his gloves caught between the machine. Thankfully, five other workers were present at the time of the accident and they rushed the injured worker to the hospital. In this case, as Kapil was the employer and had a workmen compensation insurance policy, he informed the insurance company who agreed to offer the legal liability coverage to the injured employee.

In this case, the worker’s compensation insurance company paid Rs 2 lakh to the injured worker as compensation along with bearing the medical expenses.

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