Employees are the backbone of any business. Irrespective of business size, it’s important to safeguard the health, safety, and welfare of employees. Inadequate employee care and lack of compensation in the event of mishaps may lead to litigation against the business. The Workmen Compensation Act, 1923 was enacted under the Ministry of Labour to eliminate the need for lawsuits and as a social security measure for employees. The act aims to protect the employees by holding employers liable to compensate the employees and their dependents in the event of death or disablement caused by workplace accidents or illnesses. So, in this article let’s understand the exclusions in Workmen Compensation.
Workmen Compensation Insurance and its coverage
Workmen’s compensation policy safeguards the employer against statutory liabilities to its employees in the event of workplace accidents or illnesses resulting in death or disablement of employees. The policy works on a ‘no fault’ basis benefiting both employers and employees. The policy pays compensation to employees through employers as per the Workmen Compensation Act, 1923.
Workmen compensation insurance provides wider coverage in two forms –
- Table A – The policy protects the employer against statutory liabilities to employees as per the terms of The Workmen Compensation Act, 1923, the Fatal Accidents and the Common Law. It also covers any subsequent amendments to the said act before the policy issuance
- Table B – It offers coverage for the company’s statutory liabilities to employees as per the terms of the Fatal Accidents Act, 1855 and the Common Law.
Coverage in workmen’s compensation policy is offered for the following:
- Death
- Permanent total disablement
- Permanent partial disablement
- Temporary disablement
- Medical and legal expenses
Besides, many workmen’s compensation policies offer extensions for occupational illnesses specified in Part C of Schedule III of the Workmen Compensation Act, 1923 and coverage for contractual employees, etc.
Though the workmen’s compensation policy provides broader coverage, there are certain exclusions under the policy.
Risks excluded under the workmen’s compensation policy :
Injury due to war or nuclear perils
The policy does not include any injury caused to the employee in a workplace accident that is directly or indirectly attributable to war. Other such uncovered risks are the injuries caused due to
- act of foreign enemy
- invasion
- civil war
- hostilities
- mutiny
- rebellion
- insurrection
- revolution or military or usurped power,
- ionizing radiations
- nuclear weapons material
- contamination by radioactivity from any nuclear fuel and wastage from the combustion of nuclear fuel
Occupational diseases
The policy coverage excludes occupational diseases as stated in Part C of Schedule III in the Workmen Compensation Act, 1923. This includes diseases like Pneumoconiosis, silico-tuberculosis, bagassosis, bronchopulmonary diseases and acute pulmonary oedema of high altitude, etc. However, this can be included in the main policy through add-ons in workmen’s compensation policies offered by some of the insurers.
Contractual employees
The policy excludes persons employed in the business under a contractor or sub-contractor unless specifically covered in the policy. However, such contractual employees can be covered through extensions in workmen compensation policies offered by some of the insurers.
Injury due to terrorism
The workmen’s compensation policy does not cover compensation for injuries caused to employees due to any terrorist activity in or near office premises. However, businesses can get separate insurance policies to secure themselves against the damages caused by terrorist activities.
Injuries outside the work location
Workmen compensation policy does not cover injuries suffered at any place other than the place of employment specified in the policy schedule. However, the policy covers employees on duty at such places and working on the directions of the employer.
Injuries caused due to alcohol or drug abuse
Injuries caused to an employee in a workplace accident when the employee was under the influence of alcohol or intoxicating drugs. A person can generally lose control over their body with the consumption of alcohol or intoxicating drugs.
Self-inflicted injuries
The workmen’s compensation policy does not address injury claims caused to an employee by his deliberate attempt or intentional act. Suicide attempts, for example, are excluded.
Compensation paid under the agreement
In case the employer had promised an employee to pay for certain injuries under an agreement, such compensations are not payable under the workmen’s compensation policy.
Apart from the acts that do not fall under the legal framework, employees get protection from all other risks during workplace mishaps.
The workmen’s compensation policy provides employers protection against all statutory liabilities. However, the employer is completely responsible for the workmen’s welfare and safety. Along with implementing necessary safety measures at work, it’s essential for employers to have the right workmen compensation insurance coverage to safeguard against their statutory liabilities to employees during workplace mishaps.
The employer needs to keep in mind all the exceptions or exclusions in the workmen’s compensation policy while making the buying decision. It’s also wise to compare insurance policies online and those available in the market on a cost-benefit basis before zeroing down on the right policy.
