A workmen compensation insurance policy enables an organisation or employer to cover any liability arising due to injury, disability or death of a worker or employee while at work under the Workmen Compensation Act, 1923. It offers legal coverage against liability that may arise during the business. In general, most insurers also cover the claims that come under the Fatal Accident Act, 1855 and Common Law under the same policy.
It comes in handy at a time when there is an unexpected accident at work that may injure an employee. Even though every organisation takes all possible safety measures to avoid any such mishap, accidents do occur. It is not in the employer’s hands if there is any defect in the machines or there is a short circuit due to which a worker sustains severe injuries.
One needs to be ready to bear the expense of employees’ compensation in such cases. The timely settlement of claims is necessary to avoid forming any negative image of the organization in public view. This might lead to losing out on prospective talented employees.
Benefits of Workmen Compensation Policy
There are several benefits of a Workmen Compensation insurance policy for any organisation. Especially those in which there is a fear of occupational diseases that may affect a worker. A worker might suffer from such diseases by virtue of the place and the kind of work he does. For example, suppose a worker works at a construction site or a cracker factory; he is constantly risking his life and might catch lung diseases like asthma, bronchitis, etc. If an organisation is legally sued by such a worker, who claims to have caught the disease due to the nature of his work; the concerned company must be ready to settle the case by paying his medical expenses.
Coverages offered in the Workmen Compensation Policy
Apart from the personal injury to employees, the workmen’s compensation policy is effective in cases of death or disability of the worker as well. No employer would want that any worker faces death or disability of any kind by virtue of his work. But, the possibility of such cases can also not be denied. This policy enables the employer to bear the legal or medical expenses in such cases. It is also crucial for the vocational rehabilitation of the injured worker. Vocational rehabilitation means training the worker in some other area of a job as he cannot continue the same kind of work due to his permanent disability. This will enable the employer to maintain the trust factor that would otherwise be missing even if the medical expenses are borne by the company.
However, if the permanent disability for a partial or whole life happens to cause an injured employee to go jobless, then this policy enables the employer to provide the income lost in such cases. There should be a correct calculation of the income liability of the organisation towards the injured employee. In the absence of an insurance policy, there might be a dispute between the employer and the employee. The dispute could be in regards to the income that an employee has to receive.
Worker’s Compensation Act 1923
Under the Workers’ Compensation Act, 1923; if a worker has a temporary disability leading him to be inactive for a short period; the insurer will pay 25 percent of his wages every two weeks. In short, the insurance company will pay half of his income lost per month. However, if there is a partial permanent disability like a worker losing an arm, the compensation is calculated accordingly on the basis of the percentage of lost earning capacity multiplied by the monthly wage multiplied by a factor based on the employee’s potential future earnings.
Apart from all these provisions, some insurers provide certain special add on covers availed. SecureNow’s Workmen Compensation Policy provides extended covers for sub-contractors who are not covered by others. Also, the death and disability of employees caused due to terrorists, the activities cover if the rider is availed.
Why a Workmen Compensation Policy is important for an organization?
Formulated on a basic level to improve employee satisfaction, the workmen compensation insurance policy enables the employer to save the organization from expensive lawsuits. These could hamper the company’s reputation and its proper functioning. It is one of the tools that an employer can use to attract and retain employees. In any mishap, the company will back them up. Moreover, with the provisions of paying up medical expenses and vocational rehabilitation, the organization can also retain talented employees. Thus it helps in maintaining a trustworthy relationship with them.
The organization should opt for a feasible insurance policy, irrespective of its size and type.