Workmen Compensation

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In today’s highly competitive work environment, employees’ rights have also moved forward. Providing a safe and secure work atmosphere is one of the main responsibilities of an employer. However, one can’t deny the fact that injuries at the workplace are a common part of businesses. In order to protect your business from the threat of costly lawsuits and high compensation amounts, it becomes imperative to buy a workmen compensation policy. The workmen’s compensation insurance policy covers the statutory liability of an employer for death or bodily injury caused to employees. Known as ‘The Employees Compensation (Amendment) Bill’.
Before we discuss the workmen’s compensation insurance policy in detail, let’s first understand the Workers Compensation Act.

Workmen’s Compensation Act 1923

This Act applies to people employed in factories, mines, construction sites, and various other hazardous occupations.
As per the guidelines set under The Workmen’s Compensation Act 1923, employers have to give compensation to their employees and families in case of job-related injuries that may result in death or disability. The compensation amount depends on the nature of the injury and the age of the worker. The minimum and maximum amounts to be paid for death and disability have already been fixed and are subject to revision from time to time.

How workmen compensation insurance policy can help employers

The workmen’s compensation insurance policy offers legal liability coverage in respect of compensation paid to employees for bodily injury or death caused due to accidents, occupational ailments arising out of and during the employment tenure. Monitored by the Ministry of Labour, it is compensation that is paid under a scheme formulated under the Workmen’s Compensation Act of India.
Injured workers and compensation are one of the major liabilities issues for any organization in India. With the help of a workmen compensation insurance policy, the employer can show its ability to meet the provisions laid down by the worker’s compensation statutes.

Salient features

The workmen compensation insurance policy offers the following forms of insurance coverage:

  • Table A: Indemnity against legal liability arises due to accidents of employees under the Workmen’s Compensation Act, 1923, the Fatal Accidents Act 1855, and at Common Law
  • Table B: Indemnity against legal liability under the Fatal Accident Act, 1855 and Common Law

It is noteworthy to mention that Table B coverage may not be given to those employees who come under the purview of “Workmen” under the Workmen’s Compensation Act, 1923 as amended)

Covers available under the Workmen compensation insurance policy

Mainly, the benefits offered by the policy would depend on the type of policy chosen by employers;  some of the events covered are:

  • Death
  • Permanent total disablement
  • Permanent partial disablement
  • Temporary disablement
  • Legal costs incurred if any

Further, the policy extends to cover medical expenses incurred on necessary treatment.

Exclusions of the policy*

Though the policy aims to offer wide legal liability coverage, there are some events that are not covered:

  • Any injury caused by accident or diseases directly linked to war invasion and other perils
  • Any injury or accident which doesn’t cause fatality or partial disablement for a period exceeding three days
  • Liability towards contractor’s employees, unless specifically mentioned
  • Accidents arise under the influence of drugs or alcohol
  • If there is a disregard for the safety measures

*It is not an exhaustive list, so please check the policy in detail
Recently, the Lok Sabha passed The Employees Compensation (Amendment) Bill, 2016. The new legislation offers compensation of Rs 50,000 to Rs 1 lakh to employees and their dependents in case of injury caused due to industrial accidents. Further, whatever an establishment or factory is, it is important for them to display the Act in Hindi, English, or regional languages for the complete information of workers.
Overall, the workmen compensation policy is a boon for both employees and employers. It gives employees several benefits which help in keeping up their motivation and reducing attrition. Similarly, employers can also protect themselves from the legal liability that may arise due to the injury of workers.