Expects every business to keep the work environment safe for its employees. The employer is legally liable to pay compensation. If an employee suffers an injury (leading to disablement) or death due to workplace accidents or illnesses during the scope of employment. The Workmen’s Compensation Act, 1923 clearly states to pay compensation to employees for each type of claim. A workers’ compensation insurance policy is an effective way to protect employees and save the company from statutory liabilities related to employee claims. Let’s get to know why is workman compensation important insurance and why has it become an integral part of businesses.
What is the workman compensation? What does it cover?
Workman compensation policy is an insurance policy that provides protection to employers against statutory liabilities that arise from employees who suffer an injury or death in a workplace accident or illness arising out of or during the course of employment. Specifically, businesses require to cover a work nature that exposes workers to hazardous environments.
Workmen’s Compensation Act, 1923 (now known as Employee’s Compensation Act), social security legislation protects ‘workmen’ and their dependents. In case of an injury or death during job-related accidents or illness. As per the act, the employer is liable to compensate the employee who suffers workplace accidents or illness arising out of or in the course of employment for the following:
- Death
Compensation as stated in the Workman Compensation Act is payable to the dependents of deceased employees.
- Permanent total disablement
In this case, if the employee was completely disabled and expects not to return to work in a lifetime. Pays Compensation to the disabled employee for loss of income.
- Permanent partial disablement
If the employee is permanently disabled and unable to perform work at full physical capacity even after the recovery. Pays Compensation to a disabled employee for loss of wages/income (on a pro-rata basis) and medical expenses.
- Temporary disablement (total or partial)
It is the disability that temporarily makes an employee incapable to work. It can be of total or partial nature. Compensation, as stated in the Workmen’s Compensation Act, will be payable to employees till recovery.
- Legal expenses incurred with the prior consent of the insurer
Workman compensation policy pays the compensation as it is stated in the Workmen’s Compensation Act, 1923. Workmen’s Compensation Act 1923. governs businesses that employ less than 20 employees.
Click here to know more about how the employer’s liability is decided under a workman’s compensation policy.
Importance of workman compensation
Many businesses consider workman compensation as just an unnecessary cost to the business. But, the workmen compensation policy is an essential cost to businesses as it protects the business from the serious financial burden of compensating the employees and paying for their medical care. Specifically for high-risk businesses, it’s important to have insurance protection to save themselves from costly claims and also to protect the employees. Here are some of the key benefits offered by workman compensation policy because of which it is a wiser decision to have for businesses.
Benefits
No-fault coverage
No matter who is at fault, workman compensation policy ensures provides protection to employees and to their dependents when workplace accident or illness results in death or disablement. Even if the employer is not at fault, would still provide compensation to employees.
Protection to employees
The policy pays compensation to employees of the insured employer. Supposing workplace accidents or illnesses leading to death or disablement. In case of death of an employee occurs in a workplace accident or illnesses related to the job, dependents are paid compensation for the loss of regular income. In case accidental injuries or job-related illnesses result in disablement of any type, the policy compensates for the lost wage. And income along with paying for medical expenses.
Statutory benefits for the employer
It is the legal responsibility of every employer to protect the safety, health, and welfare of their employees. In case of any mishaps at the workplace. For any occupational illnesses leading to death or injury to a worker, the employer is responsible. As per Workman Compensation Act, 1923, the employer requires to compensate the employees and their dependents for loss of wage or income, medical expenses, and disability. Workmen’s compensation policy compensates the employer for statutory liabilities to employees as stated in the Workmen’s Compensation Act, 1923. Without workers’ compensation insurance, businesses are responsible for paying medical expenses. And even lost wages if an employee experiences injuries in a workplace accident.
Extensions or add-on benefits
Along with covering death, disablement, and medical care expenses, many of the workers’ compensation policies in India provide extensions, to the main coverage at an additional cost. Offers many features as optional benefits under the workman compensation policy. For example, coverage for contractual employees includes in the policy as an extension. Same way, some policies provide extension cover for occupational diseases mentioned in Part ‘C’ of Schedule III of the Workmen Compensation Act, 1923 which are generally excluded from the main policy.
Workman compensation policy provides two-way benefits. It works as an employee benefits package as well as saves the employer from legal complications. Arising out of statutory liabilities. Hence, a workman compensation policy is one of the basic insurance, crucially needed for the business. SecureNow can help you choose the right policy as per your needs, you can compare insurance quotes online and get the best benefits available among different insurers.
About The Author
Rahul Kumar
MBA Finance
With a wealth of experience in the insurance industry, Rahul is a seasoned writer specializing in articles related to workmen compensation policies (WC policies) for SecureNow. With 12 years of experience in the field, he has acquired in-depth knowledge and expertise in workmen compensation insurance, understanding its complexities and nuances. Their insightful articles provide valuable insights into the importance of WC policies for businesses and employees alike, offering practical advice and guidance on navigating the intricacies of insurance coverage. Trust him to deliver informative and engaging content, backed by years of experience and a passion for educating readers about insurance-related topics.
