Workmen Compensation

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A worker compensation insurance gives legal liability coverage to the employer which may arise when one of its employees gets injured during the working hours. Similarly, a group health insurance policy takes care of medical expenses of the employee. Both the covers serve the different purposes.

An employee can get coverage either in worker compensation insurance or health insurance for the same injury. It means the principle of indemnity applies which says that in any case, the insurance company will not pay anything more than the actual loss.

Read More: How Do You Get Workers Compensation Insurance?

In any case, both the workmen compensation insurance company and group health insurance company can’t settle the entire amount with regard to the same injury. It means the insured will not get more than the loss.

Even in a situation where the injured worker approaches both the group health insurer and workmen compensation insurance company, the loss will be settled on a proportionate basis. For instance, both the insurance policies cover medical expenses. If a worker approaches both the insurers for the settlement of medical expenses, the claim will be divided between them.

It has been seen that many times employers discourage injured worker to approach the workmen compensation insurer as there could be a stigma associated with such claims. Also, a worker might be uncertain about his ability to prove that an illness is work-related or not. Therefore, such workers prefer to approach their group health insurer.

In the case where the injury results in permanent disability, the injured worker should approach the workmen compensation insurance only because it covers loss of income as well, whereas group health insurance only pays for medical expenses and doesn’t cover income loss.  Similarly, if the claim is related to non-work injuries, the compensation will be settled only by group health insurance policy.

Case: 1

For the last three years, Mr. Nirmal Sinha was working in a W.N Engineering Company as a technician. The company had stringent safety measures which all its employees diligently followed.

On a personal front, he had a two-year old son and a wife with whom he was living in Delhi. Last year, while playing with his son at home, he slipped on the stairs. He fell to the ground and suffered grave injuries in his back. With the help of neighbors, her wife rushed him to a hospital where doctors treated him for his injuries.

Due to the fall, he became temporary disable from the lower body and had to stay in the home for approximately six months.

While the emotional and physical loss can’t be curtailed in any scenario, the group health insurance policy of Nirmal helped him in covering the medical expenses. He asked his wife to approach the HR department of his company and filed the insurance form accordingly. The insurer asked for medical reports and after carefully reviewing the situation, settled the claim.

In this case, W.N Engineering Company was offering workers’ compensation insurance policy as well, however, Nirmal was not eligible to get benefits under it. As the accident happened at home, it did not fall under the purview of the workmen compensation insurance policy.

In this case, the corporate health insurance policy offered by W.N Engineering came to the rescue of Nirmal as the policy settled the medical expenses.

Case: 2

22-year old Suraj was happy to get his first job. Now he was able to support his family financially. He got a job in the paper mill on a monthly income of Rs 8,000. For the first few days, the company provided him training on the safe usage of the machines.

Read More: Who Should Buy Workers Compensation Policy?

Though Suraj always paid attention while working, unfortunately, four fingers of his right hand came into a paper machine while working on it. His supervisor, Ajay Shukla, was present at the time of the accident and he immediately stopped the machine and rushed Suraj to a nearby hospital.

The doctor treated him for his injuries and kept him under observation for one week. Sadly, due to the accident, he lost all his four fingers. The disability forced him to change his current job profile and opt for the low earning occupation.

After a week, when Suraj was discharged from the hospital, his colleagues and supervisor, Ajay, came to see him.

As the paper mill was offering both the workmen compensation insurance and group health insurance policy, Suraj consulted his supervisor to know which insurer he should approach. In this case, his supervisor advised him to go with a workmen compensation insurance policy.

As Suraj also suffered from a temporary disability and had to stay at home, the workmen compensation insurance not only covered the medical expenses but also paid compensation to cover the loss of income. The accident happened during working hours, and therefore, Suraj was eligible to get benefits under workmen compensation insurance policy as well.

As Suraj did not approach the group health insurance company, the entire claim was settled by the workmen compensation insurance company.

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