Insurers’ liability under worker compensation insurance is defined as per Common Law or the Workmen Compensation Act 1923 in case of occupational disease. According to the Act, an occupational disease is a disease that a worker may contract while in service of the employer. One has to prove that the disease contracted is related to the occupation of the worker to claim policy benefits. To receive compensation, the worker should be employed with the insured company for a minimum of 6 months. In that case, the insured has to pay compensation to the worker if a work-related disease is inflicted on him/her.
Occupation disease falls under workmen compensation policy coverage
Certain occupational diseases falling under this policy are as follows:
- Bronchopulmonary disease caused by flax, hemp and sisal dust (Byssinosis)
- Skin diseases caused by physical, chemical or biological agents and
- Occupational asthma is caused by recognized sensitizing agents which are inherent to the work process.
The employer is also liable to pay compensation when a worker’s pre-existing disease aggravates due to work environment or work-related injury.
The insured has to compensate even though a worker had a disease prior to working with him. Wages are an important determinant of the compensation amount. The insurer considers the wages of the worker at the time of his termination from employment. The calculation of compensation does not take into account the date of contracting the occupational disease.
Case Study
For the last five years, Mr Jeevan Saran was working with T.S Electrical Company as a senior electrician. His job duty included welding different electrical parts.
However, for the past few months, he was experiencing breathing issues and constant coughing problems. When the situation deteriorated further, he went to his doctor for treatment. The blood test report indicated exposure to isocyanates, which develop in welding fumes— a well-known cause of occupational asthma.
The doctor prescribed some medicines and suggested one-week bed rest. Jeevan informed his manager about his medical condition. Jeevan took seven days’ leaves on request.
The manager advised Jeevan to approach the insurance policy to get workmen’s compensation. As his disease was an occupational ailment, it came under the purview of the workmen’s compensation insurance policy.
The conclusion from the case
In this case, Jeevan filed a claim under workmen’s compensation insurance. He asked the insurer to pay his medical expenses for asthma which occurred because of his occupation. The workmen’s compensation insurer asked for a complete account of the ailment along with the doctor’s report. To see if asthma-associated, with his job such reports were needed.
T.S Electrical Company always asks for a medical test report from its new employees to see if job applicants are physically fit for work. Jeevan also submitted a medical report at the time of joining the company.
The workmen compensation insurance company asked for their medical report of Jeevan, which he submitted at the time of joining the company. The insurer wanted to confirm that asthma was not a pre-existing ailment.
The HR division of T.S Electrical Company provided Jeevan’s medical report to the insurer.
Now the insurer had all the important documents related to the claim, which its claim department thoroughly inspected and verified. The insurer agreed to settle the claim after ascertaining that the insured developed the ailment during working hours.
The insurer approached T.S Electrical Company to know the salary of Jeevan. At the time when Jeevan visited the doctor for the treatment, he was earning Rs 8,000/month. However, his salary increased to Rs 10,000/month at the time of reporting the claim.
Now, the workers’ compensation insurance company considered the revised salary of Jeevan, i.e., Rs 50,000 and settled the claim on the basis of it.
