Any company or employer, including contractors, who hires workers as defined in the Workmen Compensation Act, of 1923, can purchase a workmen compensation insurance policy. This insurance cover provides legal liability coverage and also helps in easing the financial burden on employees and employers.
Employers can meet the medical expenses of their employees in case they suffer injuries at the workplace. It also covers the legal cost when employees file lawsuits against employers for injury during their work. Since it also covers legal expenses and compensations ordered by labor courts, it provides significant financial relief to organizations.
Industries/firms that can take Workers Compensation Policy
The following firms or industries can take benefit of workmen compensation by buying it.
- Firms, corporates or associations, or persons employing workers on contract
- Any Indian firm hiring a worker in a foreign country as a driver, labourer, or any other menial jobs
- Shipping ports, docks, companies, and ship owners
- Construction firms, contractors, and builders for workers involved in repairing, constructing and maintenance of the building
- Civil engineering firms, contractors, and firms
- Nuclear mining, reactor, and other handling companies or firms
- Any firm, establishment, or corporate employing watchmen
- Farming companies that employ workers to farm, harvest, and process farm produce
These organizations, along with any other firm or business entity, must ensure a safe work environment for workers/employees employed on a part-time or contract basis. However, the cost of treatment for an injured or infected worker lies with the employer. The employer must cover the expenses for treating injuries or permanent damage to the worker’s body or mind that occur during employment.
Therefore, compensation is payable to the worker by the employer. The Workmen Compensation, Act 1923 defines this financial liability.
See: How to Calculate settlement in Worker’s Compensation Injury?
Hence, any employer -whether individual or firm is liable to provide compensation for its employee’s medical treatment. Workmen Compensation Act also covers workers engaged in menial tasks, including electrical maintenance. Anyone, whether an individual, company, or corporation, who employs such workers should purchase Workers’ Compensation insurance to promptly address liabilities.
Case on Workmen Insurance capability
Willman & Colt Ltd. is a firm dealing in defence equipment and explosives. It manufactures gun barrels, enforced steel wheels, mines, bullets, and gun shells. It employs approximately 150 employees and workers throughout the country.
Around 90 workers, out of its total workforce, engage in loading and unloading tasks. Among these, many engage in the transfer of explosives and handling semi-finished and finished products of the company. W&C Ltd. is responsible for compensating these workers if they sustain injuries while operating.
However, because of the high risk of damage, health and critical cover are not available to these workers.
See: What is indemnity in Workers Compensation Insurance?
Colt Ltd. must buy a workmen compensation policy to offer its workers sufficient financial backup in adverse circumstances. The policy also covers the drivers and guards employed by the firm. Both these workers are contractual and not entitled to the group health and term life policies.
Case 2
ShineGram is a Shoe Polish brand, which manufactures and markets a diverse range of products for shoe and leather care. The company employs more than 30 contractual workers in various stages of the manufacturing process. Most workers do packing and loading as well as unloading of the goods.
The company must provide compensation for injuries or illnesses suffered by a worker during work and at the workplace.
So, ShineGram must buy a workmen compensation insurance policy to cover its liability towards these workers.
The policy also covers drivers and other menial workers. The insurance coverage also includes other employees serving the company in different roles, such as electricians and housekeeping staff.
This insurance gives factories an advantage in attracting dedicated workers and reduces the risk of conflicts between workers and management.
