The statutes of the Workmen’s Compensation Act, 1923 make it mandatory for all employers to have a workmen’s compensation policy to protect their employees. The workmen’s compensation policy covers the legal liability faced by an employer if the employee dies or becomes disabled during the course of employment. In case of any employment-related injury or death, the employer is liable to compensate the employee and/or his family for the contingency suffered. The workmen’s compensation policy covers this liability giving the employer financial relief. So, let’s look into the conditions in the workmen’s compensation policy.
Conditions to fulfil to avail WC policy benefits
A workmen’s compensation policy, however, has certain conditions associated with it. The following conditions should be fulfilled to avail coverage and get a claim.
- The policy covers accidental deaths, permanent disablements (full or partial), temporary disablements (full or partial) or personal injuries suffered by the employees
- The death or injury should occur during the course of employment and because of the nature of employment. If the employee suffers any of the covered contingencies outside the scope of employment, coverage would not be available. For instance, in the case of a construction worker, if the worker falls and becomes disabled during the construction process, the claim would be incurred in a workmen’s compensation policy. However, if the worker meets with an accident while returning home, and becomes disabled then claims for disability are not covered. It is because it did not arise due to employment.
- The WC policy covers disabilities lasting for more than 3 days after the accident
- The policy covers legal costs incurred by the employer in case of a lawsuit filed by an employee only after consent from the insurance company
- There is an exclusion list in the workmen’s compensation policy. The policy does not cover contingencies suffered due to exclusions.
- The provisions of the Workmen’s Compensation Act, 1923 fix the limit of sum insured and its amendments. These limits are also revised from time to time. In case of a contingency, the claim depends on the maximum and minimum limits of the sum insured applicable at the time of claim.
Other important points to meet to claim WC policy coverage
- The Insurance Information Bureau of India fixes premiums for each type of occupation. It is represented per INR 1000 sum insured.
- Workers and employees covered under the workmen’s compensation policy should take due safety measures to avoid possible contingencies. If any contingency occurs due to non-compliance with safety measures, the claim would not be paid.
- Unless consent is obtained from the insurance company, the organization does not pay for the claim to the employee
- The insurance company should be intimated immediately if there is a claim
- The employer should disclose the number of employees and their wages to avail of the policy benefits. This would help the insurance company calculate the premium.
- In the case of more than one insurance policy, the principles of the contribution clause determine the liability of each insurance company
Every organization which buys a workmen’s compensation policy should understand these conditions and fulfil them to enjoy proper coverage.
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