Any firm or employer, a contractor who employs workmen as defined in the W.C. Act 1923 can buy the 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 the course of their work. Since it also pays for legal costs and compensation awarded by the worker courts, it serves as a big financial relief to organizations.
Industries/firms that can take WC 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, or any other firm or business entity, while employing workers/employees on a part-time or contract basis, must provide a safe work environment to the such workforce. However, the cost of treatment for an injured or infected worker lies with the employer. The treatment cost of injuries sustained or permanent damage to his physique or psyche during the term of work is also the responsibility of the employer. 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.
Any person, firm, or corporate who employs such workers should buy the Worker’s Compensation insurance to take care of the liability in a 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.
Around 90 workers of its total workforce are involved in loading and unloading tasks. Among these, many are engaged in the transfer of explosives and encasings and semi-finished and finished products of the firm. 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 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 has to pay compensation in case of an injury or infection of a worker arising due to 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 cover is also provided to others employed by the company in different capacities, ranging from electricians to housekeeping staff.
Such insurance also provides the factories with an edge over competitors in attracting sincere workers and lowering the risk of worker-management conflict.
