Worker compensation policy cannot be purchased by an employer who is not recognised under the Worker Compensation Act 1923. In other words, an employer or an employee who do not qualify under the official status of the Act will not be considered under the insurance jurisdiction.
Voluntary or mandatory, a company should know about exclusions in workers’ compensation policy:
- Any incident which is not recognised under the common law or rules of the Workers Compensation Act 1923
- An injury which has occurred anywhere not recognised/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 which does not lead to fatality or partial disability after 3 days is not covered
- Any liability towards contractual employees unless contractual employee cover is purchased by an employer
- Any unspecified liability towards employees on contractual basis
- Any health risk under the influence of drugs or alcohol
- Any intentional act of misconduct by the employee
- Any 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 is proven that the safety measure was not adhered to or tampered with
- If an employee is noted 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. He is required to do night shifts after every 15 days. He is a working on a project basis with the company for 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. He is rushed to the hospital and is declared dead on arrival. As is legitimate, Digvijay is entitled to the compensation under the workmen 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, and is 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 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 is not covered under the policy. Also, if it is proven that the injury is self-inflicted, the company is not liable for his treatment expenditure.
In another case at Akash Energy, an energy solutions company which makes and sells gas generators faced a fire incident in which two of the contract workers got injured while installing a generator at the client site.
Investigations revealed that the workers who were on a break lit up a cigarette lighter in a no smoking zone. The gas which was to be connected to the generators was not plugged in properly and leaking. It caught fire and caused a small explosion which 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.
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