Workmen Compensation

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How to decide the Insurer in Workers’ Compensation?

A workmen’s compensation policy provides a wide scope of coverage for the insured organization. The policy covers financial liabilities in case of physical injuries, permanent or temporary disablements and even death of the organization’s employees due to unexpected mishaps. Hence, it provides financial relief to organizations.

So, deciding on the right insurer to provide the workers’ compensation policy is critical. The right choice of insurer will enable an employer to adequately cover the compensation as awarded to employees by the Workers Court in case of unforeseen perils. There are a few things that you should keep in mindwhenarrivingat the best possible insurer for your worker’s compensation policy. The insurer must:

Be competent

With the large number of private and public sector players, you have to do an indepth research on insurers when choosing the right one. Make sure to get an insurer withwide presence, financial strength, requisite infrastructure to support the claim and an understanding of operating procedures of workers’ compensation insurance.

Understand the Workers’ Compensation Act

The cover and risks of this policy differ widely depending on the industry. Broadly speaking industrial & manufacturing industries face higher value and more frequent claims. Also, the workmen compensation policy premium varies for different industries. For instance, premiums for firms in mining or transport may be much higher than premiums say for an advertising firm. As the firms in the former industry are engaged in perilous nature of work while the latter industry is considered less risky.

The insurer you select must understand these differences and be willing to engage with you on industry and risk differences.

Offer comprehensive cover

The policy should cover legal liability under the Workmen Compensation Act of 1923 and subsequent amendments. Claims under the Fatal Accident Act, 1855 and common law should also be covered. The policy should include death, permanent disability, partial disability, temporary total disability, and should have an option to extend the cover for ambulance and medical expenses.

Issue policies fast

In cases related to workers’ compensation, cover notes should be issued quickly upon request. Look for agencies and insurers that accept claims 24 hours a day via e-mail and/or a 24-hour toll-free telephone service.

Provide suggestions to reduce accidents

The insurer should provide value added services like best practices in the concerned industry to avoid disaster scenarios in the future.

Have streamlined claims support

The insurer should have the mechanism in place for the processing of all aspects of your worker compensation claim. A single point of contact,online and offline presence are real value add for claim processing.

Case on Selecting Insurer for Workers’ Compensation Insurance

Cinderella Toys Pvt. Ltd. is a manufacturing and sales firm for children’s toys. It employs 15 permanent workers and some 6 – 7 temporary workers for a few months in the year. The owner of Cinderella Toys, Sanjeev Aggarwal, is looking to buy workers compensation insurance policy to cover his responsibility of compensating workers for injuries or health issues sustained during the work.

He has two choices:

  1. The Insurer promises to discount the premium but will not include any critical illnesses or medical expenses incurred by workers.
  2. The insurer will charge about 15% higher but cover liabilities under the Act as well as the treatment and transportation costs of injured worker(s).

Also, managing the policy is easy with the second insurer. Sanjeev can pay the premium online, through their web portal and get 24×7 claim support. Both companies promise hassle-free maintenance of the policy. However, as  the first company does not offer online management, Sanjeev has decided to go with the second option. That’s the right choice.

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