Worker compensation policy cannot be purchased by an employer who is not recognized under the Worker Compensation Act 1923. In other words, an employer or an employee who does not qualify under the official status of the Act is not under the insurance jurisdiction. In this article, we will find out what is not covered in worker compensation policy.
Voluntary or mandatory, a company should know about exclusions in workers’ compensation policy:
- Any incident which does not recognizes under the common law or rules of the Workers Compensation Act 1923
- An injury that has occurred anywhere not recognized/declared as the place of business as per the terms of the contract
- An injury caused by war or associated perils
- Any disease caused by war or associated perils
- An injury that does not lead to fatality or partial disability after 3 days will not cover.
- Any liability towards contractual employees unless contractual employee cover purchased by an employer
- Any unspecified liability towards employees on a contractual basis
- If any health risk under the influence of drugs or alcohol
- Any intentional act of misconduct by the employee
- If injury inflicted due to personal reasons by an employee
- Any injury to an employee after he/she voluntary participates in off-duty recreational activity
- If it proves that the safety measure does not adhere to or tamper with
- If an employee notes for disobedience on-duty
- There is no coverage of mental disorders arising out of work, like doing monotonous work
Case on Excluded Perils in Workmen Compensation Insurance
Digvijay is an employee with a big BPO company in India. And requires to do night shifts after every 15 days. He’s working on a project basis with the company for the past 6 years. He is 35-years old.
During a night shift, Digvijay slips on the stairs due and lands head down on the floor. When they rushed him to the hospital he was already dead on arrival. As is legitimate, entitled Digvijay to compensation under the workmen’s insurance policy. He is not a full-time employee of the company and thus not covered under its group health or term life policies.
Another employee Jay, who is 30-years old, associated with this company for 5 years, suffers from a physical injury at the office. Further investigation reveals that Jay has been suffering from depression, and is professionally seeking help for the last 6 months. Additional facts also cause suspicion, given the nature of his injury, that it might be a case of self-inflicted injury because of his mental condition.
The insurance company will closely investigate the case, as Jay’s mental disease does not cover under the policy. Also, the company is not liable for his treatment expenditure if he injured himself.
In another case at Akash Energy, an energy solutions company that makes and sells gas generators faced a fire incident. At the client site, two contract workers got injured installing a generator.
Investigations revealed that the workers lit up a cigarette lighter in a no-smoking zone when they were on a break. The gas connecting to the generators was leaking. Hence, it caught fire and caused a small explosion that partially burned the workers’ exposed skin.
The insurer rejected the compensation claim as the workers disobeyed the rules and compromised the safety of the equipment and themselves.