A workmen’s 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. To take care of this financial responsibility, a workmen’s compensation policy is designed.
Let’s have a look into the important workmen compensation features which make the policy distinct in the coverage provided –
Salient features of Workmen Compensation Policy
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, the courts use some heuristic rules related to the age and income of the worker to decide compensations.
The workmen’s compensation policy does not provide benefits for a few instances. These policy exclusions and common exclusions are:
- Injuries suffered due to war, terrorism or nuclear threats
- Injuries suffered by third-party employees
- Attempted suicide or deliberate self-inflicted injuries
- Injuries suffered outside of work
- Agreed compensation payable to employees as per an agreement
- Injuries suffered under the influence of intoxicants
Workmen’s compensation policy also provides additional coverage at an extra premium. Some common extensions include coverage for contractual employees, medical costs, and for occupational diseases.
Benefits of worker insurance 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 gets financial security knowing that any possible liabilities and compensation would be paid by the workmen compensation policy. This also maintains the employer’s profitability 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
Under this clause, the policy will only pay the actual costs incurred by the employer in litigation, penalties and court awards. Hence, the employer cannot profit from this insurance.
Workman compensation is unnamed insurance. so it means that individual workers do not need to be named. However, an absolute number of workers needs to be provided. 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 due to new joining or even attrition. Under the average clause, the sum insured is modified by the insurance company to cover the changed number of employees, subject to certain terms and conditions. So, if at the time of a claim, there are more workers than initially declared a lower amount will be paid.
There are sometimes two or more workmen compensation policies taken by an employer. In the case of multiple policies, the insurance companies would share the claim amount in the 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 that you can provide a comprehensive scope of coverage to your employees and also let you be financially secure.