Every employer does its best to ensure workplace safety. Still, accidents do happen at the worksites or offices where the employees can get severely injured. An employer needs to understand his/her legal responsibility to make their workplace in India safe. Buy employee compensation (EC) or workman compensation (WC) insurance to protect against lawsuits resulting from workplace accidents.
Unsure if you need a WC policy for your specific type of business?
Many business owners think there is no need to buy employee’s compensation insurance, and they can take care of the rare mishap as and when they might occur. Surprisingly, some business owners are even unaware of EC policy. Lack of awareness causes them significant financial losses resulting from lawsuits related to workplace accidents.
Understand the importance of buying this insurance and how it saves you from incurring financial and legal liabilities
Here are some common questions you may want to ask about this insurance policy before buying one:
What kind of businesses need an Employee Compensation policy?
Regardless of the type of business you run, there is always the risk of workplace accidents. Therefore, it is wise to invest in Employee compensation insurance for your business. Similarly, the size or strength of your business does not matter. Whether you run a small business or a big established organization, you must buy this policy.
The reasons to buy this insurance can differ based on the risk factors associated with each industry. For instance, if your business involves labour-intensive activities, such as construction or mining, the risk of a worksite accident or mishap is considerably high. On the other hand, if yours is an IT company, you need to buy an EC policy as per basic legal or contractual requirements as well as minimize the risk of certain significant mishaps through good work practices.
What Makes It Legally Necessary for You to buy EC Policy?
The Workmen’s Compensation Act, 1923, aims to offer compensation to the workmen or employees in case of an accident arising out of employment activities. Furthermore, if an employee suffers from an occupational disease, the employer will be held liable for the same and have to pay compensation.
This Act makes it important for every employer in India to know what an EC policy is and buy it too. It is legally necessary to buy an Employee Compensation Policy to comply with labor laws in many jurisdictions. This policy provides financial protection to employers against liabilities arising from work-related injuries or illnesses suffered by employees, ensuring that they receive compensation and medical benefits as mandated by law.
What will you get on buying an Employee Compensation plan?
Buying an Employee Compensation policy comes with several advantages for you, such as:
- Coverage for medical expenses arising from accidents caused during employment
- Legal liability coverage related to a workplace accident
- Occupational disease coverage varies from one industry to the other
- Statutory liability cover in case of a workman’s death
- Tax benefits on the EC policy premium paid
Can an employee sue you because of a workplace injury?
You must know that as per the Worker’s Compensation Act, any of your employees can sue you for injuries caused to them in case of a workplace accident. If you do not have employee compensation, also known as workmen compensation insurance, you would have to pay for the compensation and the legal costs involved. However, you can avoid paying for all this by buying a WC policy.
As detailed above, buying this insurance is not limited to some specific industries only, but is required for all businesses. It is crucial that you gain knowledge about what a WC policy is before buying one.
About The Author
Rahul Kumar
MBA Finance
With a wealth of experience in the insurance industry, Rahul is a seasoned writer specializing in articles related to workmen compensation policies (WC policies) for SecureNow. With 12 years of experience in the field, he has acquired in-depth knowledge and expertise in workmen compensation insurance, understanding its complexities and nuances. Their insightful articles provide valuable insights into the importance of WC policies for businesses and employees alike, offering practical advice and guidance on navigating the intricacies of insurance coverage. Trust him to deliver informative and engaging content, backed by years of experience and a passion for educating readers about insurance-related topics.
