The employer takes the worker’s compensation insurance to cover the risk of the employment injury of its employee who is considered as workmen as per the Workmen Compensation Act.
The employers with more than 20 workers are compulsorily needed to get them registered under the Employees State Insurance Act. But, whereas the employers with less than 20 workers come under the purview of the Workmen Compensation Act and need to register themselves under it.
As per this Act, any worker (including the casual workers) is entitled to compensation from the employer in case he meets any accident and injures himself:
- While being engaged in the work;
- Or during employment, i.e., during the working hours;
- And such injury resulted in disability.
The compensation is payable under the Act if the injury caused leads to disablement which covers the death of the employee, permanent total disability, permanent partial disability, including temporary disability as well.
Under the Workers Insurance, the employers are protected against any liability that he can incur due to the applicability of the Workmen Compensation Act. The policies can be extended to cover:
- The liability to employee as an employer for any accidental injury caused during work.
- Hospital expenses, including ambulance charges and other medical expenses in respect of occupational accidents.
- There are certain diseases mentioned in Part C of the Schedule III of the Act which also requires the employer to pay compensation if the disease arises out of or during employment.
The Act has also defined the maximum compensation that needs to be paid in each of the cases, i.e. the death, the permanent or temporary and partial disability. So, the employer needs to make sure that he buys sufficient insurance to cover these risks.
Also, this policy covers the liability of an employer under the Indian Fatal Accident Act 1855 and the common law.
Case for Workers Compensation Insurance
Mr. Harsh Nair runs a small chemical manufacturing company with just only 18 workers. Since the number of workers is less than 20, he comes under the purview of the Workmen Compensation Act and is liable to pay compensation to workers for any injuries caused during the work hours.
Since chemical manufacturing can be a risky affair and more prone to accidents, Harsh decided to cover his risk by buying a worker’s compensation insurance. This is how the insurance helped him on various occasions:
While working on the boiler one day, one of the worker Ram accidently poured hot water on his hand, which caused 80 % burns on his hand. The injury was severe enough to cause a partial disablement for Ram for about two months. The workers’ insurance paid Ram the appropriate compensation that the statutes of the law entitled him along with some compensation from Harish, who agreed to employ him again in another role.
For the chemical manufacturing, various science experiments are required to be done. During tests, sometime fumes are created which may be injurious to health and cause respiratory problems. Many of the workers are reporting respiratory problems that they contracted during the ordinary course of manufacturing of chemicals. They also became entitled to compensation under the Act as it was a covered disease under Part C of the Schedule III of the Act.
One day the bus carrying all the workers to the factory gate met with an accident and injured some of the workers. The workers became entitled to the compensation since the incident happened during the work hours and all the injured workers were provided the requisite sum by the insurance company.
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