Tap to Call

Employees Compensation Policy
(Workmen Compensation Policy )

100K+
Insured

280+
client

4.9
Rating

100% Bootstraped
Company


Get a free review of your
policy today

    We respect your privacy

    280+ Happy Clients, 100K+ lives insured and growing...



    Workmen Compensation Policy


    What is the Employees Compensation policy ?

    What is the first thing that comes to mind when you hear the word exploitation in an industrial context? Unhygienic environment, long hours, subsistence wages? Well, that used to be the case till about the first two decades in the twentieth century. But then the government sensing upheaval by the proletariat passed the Workmen Compensation Act in 1923.

    The act was primarily aimed at protection of workmen from being exploited by the industrialists. Read More..

    Sensing an opportunity, Insurers started underwriting insurance aimed at protecting Employers from any liability that could arise in the workplace or during the working hours under the Workmen Compensation Act (now the Employee’s Compensation Act). The policy is called the Employees Compensation policy, Workmen compensation policy, or Labour insurance policy. The coverage under the policy has since outgrown its original purpose; the policy is today an instrument to protect the Employer against common law as well.

    The Act adopts a broad framework in addressing the concerns of employees or workmen at workplace, so much so, that an employee traveling to work is treated as in course of employment. The Employee Compensation policy in turn accommodates any liability that may arise towards an employee during the course of employment. The policy has graduated to incorporate add ons like legal expenses, with the consent of the Insurer.

    While the policy had many takers in the manufacturing industry till about the end of the twentieth century, it is finding an equal number of takers from technology infrastructure industry as well, so much so that some of the US companies that have setups in India insist on having the policy in place before they can commence any operation.

    The advantage of Workmen’s compensation insurance is that it covers any liability that may arise toward a workman recruited for work abroad, i.e. employed outside India, in any capacity, as specified in Schedule II of the Act.

    In simpler words if an Indian person is recruited by a company registered in India, but is posted in any foreign country, s/he will also be covered under the Workmen’s Compensation Act.

    What does the policy cover?

    The policy covers liability arising out of



    Death and Disability of an
    employee


    Medical charges towards
    hospitalization against bodily
    injury of an Employee


    Legal cost incurred while
    contesting a claim awarded
    under the Employee
    Compensation Act


    Occupational diseases arising
    as a result of workplace
    conditions


    Compensation Awarded
    Under Common Law


    Compensation Awarded
    Under Fatal Law


    Difference between Employees Compensation and Group Personal Accident Policy



    Workmen Compensation - Labor Insurance Policy

    Workers Group Personal Accident Policy

    Mandatory as per the Employees’ Compensation Act, 1923 & Indian Fatal Accidents Act, 1855Not mandatory by law.
    A policy to protect the employer against his liability from the workmen compensation act as well as fatal accidents and common lawA Policy to give a fixed compensation to Employee or his family incase of any death or disability of employee
    Employee is covered only when the accident happens while he is on duty or during the course of employment.Covered 24/7 worldwide irrespective of whether the employee was on duty or not.
    Covers Death, Disability, fixed Medical expenses. Occupational diseases are coveredCovers Death, Disability, fixed Medical expenses. Treatment of or death due to occupational diseases is not covered.
    Also Covers compensation related to Common Law.Compensation under common law is Not Covered
    Premium is decided based on the employee salary which is classified into 2 sections normally such as below 15k and above 15k.Premium is decided based on overall Sum Insured under the policy.
    Not payable if the employee was under the influence of drinks/drugs or has disobeyed safety protocols i.e out of the employee’s negligence Accidental death/ disability covered as long as not in violation of state law; for eg. drinking and driving is prohibited by law, accidental death arising out of such occurrence would not be payable.
    Compensation that would be due is fixed by the Tariff. It is calculated on the basis of the severity of the event, age of the employee and the wage of the employee An employer can choose the sum insured which can be a multiple of the salary or a graded cover according to the designation

    What are the exclusions under the Workman Compensation policy?

    The policy however reciprocal of the Act, does not cover


    • Any penalty as imposed on the Employer under the WC Act.
    • Non fatal injuries or ones where the Employee recuperates in a three day time frame.
    • Any liability towards contractual employees.
    • Accidents caused under the influence of intoxication.
    • Any liability arising out of war or invasion.
    • Any such injury not resulting in death or permanent total disability caused by an accident.
    • Any such injury caused due to the wilful disobedience of the employee to an order passed by he company exclusively framed for the purpose of securing the safety of the employees.


    What is the amount of compensation, in different scenarios in Workmen’s Compensation Policy?



    Scenario

    Amount of Compensation

    Death as a result of injuryAn amount equal to 50% of the monthly wages of the deceased workman multiplied by the relevant factor Or;
    An amount of one lakh twenty thousand
    (whichever is more)
    Permanent total disablement resulting from an injuryAn amount equal to 60% of the monthly wages of the deceased workman multiplied by the relevant factor (provided at the end) Or;
    An amount of one lakh twenty thousand rupees
    (whichever is more)
    Permanent partial disablement resulting from an injury
    • In case of an injury specified in Schedule such percentage of the compensation which would have been payable in the case of permanent total disablement as is specified therein as being the percentage of the loss of earning capacity caused by the injury,
    • In the case of an injury not specified in Schedule, such percentage of the compensation payable in the case of permanent total disablement as is proportionate to the loss of earning capacity (as assessed by the qualified medical practitioner) permanently caused by the injury
    Where temporary disablement, whether total or partial result from the injuryA half-monthly payment of the sum equivalent to 25% of monthly wages of the workman, to be paid in accordance with the provisions

    FAQ’S

    In India, it's mandatory for companies to ensure adequate compensation for their employees, in case the employee is disabled to tend to work and the disability has been caused due to the nature of employment or in the course of employment - this is in line with the provisions of the Employee’s Compensation Act, 1923 and Indian Fatal Accidents Act, 1855.

    Not only do business owners need to have an Employee's Compensation Policy to meet this statutory requirement, but some clients, especially ones based out of US/ Europe, mandate such policies before they can sign the contract to commence business. Employees of IT/ ITeS companies may get injured while traveling for work - such liability would need to be covered under Workman's Compensation Act.

    The Employee Compensation policy is a legal liability policy with unlimited liability, whereas Group Mediclaim (GMC) is an indemnity policy & Group Personal Accident Policy (GPA) is a defined benefit policy i.e. the quantum as well as triggers that lead to a claim are defined at the inception in both the GMC as well as the GPA policies.

    While having a GMC & GPA policy for your employees is indeed a good practice, there are some claims that would fall outside the purview of both your GMC as well as GPA. Here’s why you need to insure yourself under the WC policy

    • Claims under the WC act are awarded by a Commissioner, and could vary for every single employee. Quantum of claim settlement under Group Personal Accident policy is predefined. If you have insured your employee for 2 Lakh under the GPA but the award comes out to 3 Lakh, that is additional money you will have to shell out of pocket.
    • Occupational diseases are outside the purview of a GPA and therefore any liability that may arise out of such a claim would have to be paid out of pocket.
    • The WC policy covers loss of wages which is not covered under GPA.