How does Workmen Compensation benefit an Organisation?
A workmen compensation insurance policy enables the employer to cover any liability arising due to injury, disability or death of a worker or employee while at work under the Workers’ Compensation Act, 1923. It offers legal coverage against liability that may arise during 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 any 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 company in public view and losing out on prospective talented employees.
There are several benefits of this 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.
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 not only enables the employer to bear the legal or medical expenses in such cases, but also is 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 injured employee is rendered jobless due to permanent disability for partial or whole life, then this policy enables the employer to provide the income lost in such cases. The correct income liability of the organisation towards the injured employee needs to be calculated correctly. In the absence of an insurance policy, there might be a dispute between the employer and the employee regarding the income that needs to be paid in such a case.
Under the Workers’ Compensation Act, 1923; if a worker has a temporary disability leading him to be inactive for a short period; he will be paid 25 percent of his wages every two weeks. In short, he will be paid half of his income lost per month. However, if there is a partial permanent disability like a worker loses 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, certain special add-on covers can also be availed provided by some insurers. SecureNow’s Workmen Compensation Policy provides extended covers for sub-contractors who are not covered by others. Also, death and disability of employees caused due to terrorist activities can be covered if the rider is availed.
Formulated on a basic level to improve employee satisfaction, the workmen compensation insurance policy enables the employer to save the organisation from expensive lawsuits that may 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 who have an assurance in this form that in any mishap, the company will back them up. Moreover, with the provisions of paying up medical expenses and vocational rehabilitation, the organisation can also retain talented employees and maintain a trustworthy relationship with them.
It is thus the most feasible insurance policy that must be opted by any organisation, irrespective of its size and type.