Workmen compensation insurance can be bought by any firm or employer, a contractor who employs the workmen as defined in the W.C. Act 1923 should buy the insurance policy to cover the liability.

The examples can be outlined in the following points:

  • Firms, corporate or association or persons employing workers on contract
  • Any Indian firm hiring a worker in 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, construction 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 which employ workers to farm, harvest and process farm produce

These organisations, or any other firm or business entity, while employing workers/employees on part-time or contract basis, must provide a safe work environment to such workforce. The organisation will be held responsible if the worker is injured, infected with disease, or sustains permanent damage to his physique or psyche. Therefore, a compensation is payable to the worker by the employer.

This financial liability (see How to Calculate settlement in Worker’s Compensation Injury?) is defined under Workmen (now Employee) Compensation, Act 1923.

To summarize we can state that any employer, whether individual, firm, or corporate if employs a worker for menial tasks, including electrical maintenance, will be liable to compensate such worker under Workmen (now Employee’s) Compensation Act.

Any person, firm or corporate who employs such workers should buy the Workers Compensation insurance to take care of the liability in timely manner.

Case on Workmen Insurance Eligibility

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.

Out of its total workforce, 90 are workers involved in handling the loading, unloading, and transfer of explosives and encasings and semi-finished and finished products of the firm. The W&C Ltd. is liable to pay damages to these workers if they are injured while operating, however, due to the high risk of damage, health and the critical cover are not available to these workers.

See: What is indemnity in Workers Compensation Insurance?

The Colt Ltd. must buy a workmen compensation policy to offer its workers sufficient financial backup in the adverse circumstances. The policy will also cover the drivers and guards employed by the firm where both are contractual workers and not entitled for the group health and term life policies.

ShineGram is a Shoe Polish brand, which manufactures and markets 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 of these workers are involved in packing and loading, unloading of the goods.

It’ll be the responsibility of the company to compensate the worker if he/she gets injured or contracts a disease at work. ShineGram must buy a workmen compensation insurance to cover its liability towards these workers.

The policy can be simultaneously extended to cover the drivers and other menial workers employed by the company in different capacities, ranging from electrician to housekeeping staff.

Such insurance also provides the factories an edge over competitors in attracting sincere workers and lowering the risk of worker management conflict.

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