A workman compensation policy covers the financial liabilities on behalf of organizations. In case of injury or death of workers during their employment course. As per the statutes of the Workmen’s Compensation Act, 1923, organizations are financially responsible for compensating injured workers.
A workmen’s compensation policy manages this financial responsibility. Let’s have a look into the important workmen compensation features which make the policy distinct in coverage provided
Salient Features of Workman Compensation Policy
Coverage offered
First, understand the coverage as offered by the workmen’s compensation policy. The policy covers accidental injury or death of the employee. As per policy, the insurance pays for legal costs and the costs awarded by the worker courts.
The award by the worker courts does not have an upper limit. But generally, courts use some heuristic rules related to the age and income of the worker to decide compensations.
Policy exclusions
The workmen’s compensation policy does not provide benefits for a few instances. These policy exclusions and common exclusions are:
- Injuries suffered because of war, terrorism or nuclear threats
- Injuries suffered by third-party employees
- Attempted suicide or deliberate self-inflicted injuries
- Injuries suffered outside work
- Agreed compensation payable to employees as per an agreement
- Injuries suffered under the influence of intoxicants
Policy extensions
Workmen’s compensation policy also provides additional coverage at an extra premium. Some common extensions include coverage for contractual employees, medical costs, and for work related diseases.
Benefits of workman compensation policy for employer and employee
The workmen’s compensation policy benefits both the employer and the employee. For the employer, the policy takes care of the financial liability if the worker suffers an accident during employment. The employer gains financial security, knowing that the workmen compensation policy will cover any potential liabilities and compensation. This also maintains the employer’s benefit and helps it create a good reputation in the industry.
For the worker, the main workmen compensation advantage is that the policy promises financial relief. The policy would compensate the employee for any contingencies suffered at the workplace. It prevents a situation where the courts award an amount to the worker but the company is unable to pay.
Important clauses of WC insurance policy
Below mentioned clauses are some of the specific clauses that govern the workmen compensation policy
Indemnity clause
Under this clause, policy will only pay the actual costs incurred by employer in litigation, penalties and court awards. Hence, the employer cannot profit from this insurance.
Average clause
Workman compensation is unnamed insurance. So, it is not necessary to name individual workers. However, you must provide an absolute number of workers. The average clause comes into play when the number of workers changes during the policy tenure.
The change in the number of employees can be because of new joining or even attrition. The insurance company adjusts the sum insured under the average clause to accommodate the revised number of employees. It subject to certain terms and conditions. So,if in a claim, the payout will be lower if there are more workers than initially declared.
Contribution clause of workman compensation Policy
Sometimes two or more workmen compensation policies taken by an employer. In case of multiple policies, the insurance companies would share the claim amount in ratio of the coverage offered.
So, do understand these workmen compensation features and then buy a suitable policy. The financial impact of not placing this insurance correctly can be severe. That’s why you must work with experts in the field.
To find the most relevant policy for your organization you can visit SecureNow or call 96966 83999. We would help you compare online insurance quotes. So, you can provide a comprehensive scope of coverage to your employees and also let you be financially secure.
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.
