The Workmen’s Compensation Act of 1923 works to safeguard Indian workers who experience injuries from accidents at the workplace. It helps in estimating worker’s comp amount under Workmen Compensation Act. The employer offers this compensation to the worker if injury or death resulting from the tasks they perform.
Workmen’s compensation also protects employers by establishing clear laws that define events influencing the company’s liability. It helps protect the business from arbitrary lawsuits and absurd claims of compensation by an injured employee. The WC Act entitles workers to a specific amount of compensation.
Instances eligible for Worker’s comp
The Workmen Compensation Act, of 1923 gives compensation to employees or their dependents in case of disability or death. Because of the nature of work during employment. It also protects employees from any sickness or accidents at work that might cause disability or death.
A worker is entitled to compensation if specific conditions are met.
- Death
- Permanent Total Disablement
- Temporary disablement – both total and partial
- It has contracted an professional disease
Instances excluded from Worker’s comp benefits
The Workers Compensation Act excludes some cases where workers are not eligible for compensation, such as:
- In case of injury or accident occurring because of certain perils or wars
- When employees ignored or refused to follow the laid down safety guidelines and mechanisms
- The employee had suffered the injury under the influence of intoxicants
- If the accident and resulting injury don’t result in a partial or total disability lasting more than 3 days.
Read About: What is the Workmen Compensation Insurance Policy
Factors that determine amount of Workers Compensation Insurance
The amount of benefit depends on how much the worker earns per month, the type of injury, and a factor defined in the Act. These factors help to calculate the amount of workmen’s compensation. The compensation also depends on the age of the injured employee. The compensation amount is higher when the worker is of lower age and vice versa.
Types of workers compensation and their amounts
Death
The Workmen Compensation Act requires the employer to pay compensation equal to 50% of the monthly wages of the employee who has passed away.It can be either a maximum monthly wage of Rs. 8000 multiplied by the relevant factor or a total of Rs. 140,000, whichever is higher.
Permanent Total Disablement
In case the workman has contracted permanent total disablement because of the injury, the compensation amount applicable will be a sum of Rs. 120,000. The relevant factor or 60% of the monthly wages, whichever is higher, can also determine the calculation of the settlement in a Workmen Compensation injury.
Permanent Partial Disablement
Calculating the compensation involves considering the impact of the injury on the worker’s earning ability in proportion. The Workmen Compensation Act 1923 outlines some factors, while qualified medical practitioners evaluate specific cases.
Temporary Disablement
Whether the temporary disablement is total or partial, the employer is liable to pay a half-monthly payment. The compensation is 25% of monthly wages and is paid on the sixteenth day from the date of disablement. If the disablement lasts for 28 days or more, the compensation is payable from the date of disablement. The company can take up to three days from the date of disablement to determine the compensation to be paid.
Penalty For Default And Delay
Pay compensation promptly when it’s due. If the employer doesn’t agree with the total claimed by the employee or their dependents, the employer still has to pay interim compensation equal to the agreed-upon liability.
If the employer is delayed in making payments, a 6% per year penalty applies, but it won’t exceed 50% of the total amount.
Insurance for Workmen Compensation Liability under WC Act
The liability stands with the employer and accidents are unexpected. To address this, we recommend purchasing Worker’s comp insurance to manage it. It saves a lot of unnecessary legal and other hassles in case of injury to the employee.
Insurers allow you to opt for higher compensation than allowed in the act as per your need. You can use this feature to create a valuable distinction from your competitors to attract talented contract workers.
Workmen’s compensation insurance policy benefits the organization by increasing the motivation levels of the workers toward their employers. It boosts performance as well, knowing that their company covers them in the case of loss of their earning ability. Additional safety measures on your part will certainly help you to reduce the cost of workmen’s compensation insurance.
In conclusion, understanding the Workers’ compensation amount under Workmen Compensation Act is essential for both employers and employees. Ensuring compliance and appropriate coverage can safeguard the well-being of workers and promote a safer working environment.
How to Buy Workmen Compensation Insurance?
Buying a workmen’s compensation policy is possible with just a few clicks. Go to SecureNow’s online portal and enter details such as the number of workers and supervisors to find a plan that suits your needs. Compare multiple plans offered by different insurers and buy online.
Once the payment is successful, you will receive the cover letter of your policy instantly. SecureNow makes managing your policy easier. You can add or remove employee names from the coverage and submit claims to the insurer with their assistance.
FAQ
1. What is workers’ compensation insurance?
Workers’ compensation insurance is a type of insurance that provides benefits to employees who are injured or become ill in the course of their employment. It typically covers medical expenses, lost wages, and rehabilitation costs for the injured worker.
2. Is workers’ compensation insurance mandatory for employers?
Yes, in most states, worker’s comp insurance is mandatory for employers. It is designed to protect both employees and employers in the event of a workplace injury or illness. Employers who fail to carry workers’ compensation insurance may face legal penalties and fines.
3. How are workers’ compensation insurance rates determined?
Workers’ compensation insurance rates are determined based on various factors, including the industry of the business, the number of employees, the type of work they do, the company’s claims history, and the state where the business operates. Insurance companies use these factors to assess the level of risk involved and calculate the premiums accordingly.
4. How do I choose the right workers’ compensation insurance company for my business?
When selecting a workers’ compensation insurance company, consider factors such as the company’s reputation, financial stability, customer service, coverage options, and pricing. It’s important to research and compare multiple insurance providers to find one that best meets your business’s needs.
5. When should I consider hiring a workers comp attorney?
You should consider hiring a workers comp attorney if you have been injured at work and are facing challenges with your workers compensation claim. An attorney can help you navigate the complex legal process, ensure you receive fair compensation, and protect your rights.
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.
