A reality of today’s workplace environment lies in the sense of safety and security provided by the employer. The employer must ensure that their employees feel valued, even in times of crisis.
Along with regular inspections of workplace infrastructure and employee safety training programs; a “workmen compensation insurance” or “wc policy” is also supported by the company.
Read further to know more about the workmen compensation policy and the employer’s liability coverage that it offers.
What is the Employee Compensation Act 1923?
In accordance with the “Workmen’s Compensation Act” of 1923, certain companies are liable to compensate their employees for work-induced illnesses and injuries. This act is administered by the Indian Ministry of Labour and Employment and ensures that workers and their families receive financial and emotional support in unfortunate work-related accidents.
Often referred to as the WC policy, workmen compensation insurance is a special type of commercial insurance policy that offers a wide range of coverages for a company’s legal compliances outlined in the Workmen Compensation Act and responsibilities towards their employees.
The WC policy coverage provides essential compensation to workers of an organisation in the event of unfortunate disabilities, injuries, or death during their tenure with the organisation.
Inclusions of Workmen Compensation Policy
Prior to purchasing a workmen compensation policy, one must be aware of the inclusions provided by the same. So, workmen compensation cover includes:
- Temporary disability or death related to work.
- Bodily injuries resulting from accidents that occur while on the job.
- Partial or total permanent disability.
- Legal expenses incurred with the company’s approval.
- Bodily injuries caused by diseases or conditions worsened by employment.
Detailed Employer’s Liability Coverage
| Inclusion | Compensation |
| Work-Related Injuries | Covers physical bodily injuries that occur due to accidents arising out of employment. This even includes injuries that may lead to demise.
Indemnifies the insured for any liability incurred due to employee injuries sustained in the course of employment. |
| Medical Expenses | Covers medical expenses related to the treatment of work-related injuries, including hospital bills and rehabilitation costs. |
| Compensation for Lost Wages | Provides compensation for lost wages during the period an employee is unable to work due to a work-related injury. |
| Legal Defense Costs | Includes costs associated with defending against claims made by injured employees, provided these costs are incurred with the insurer’s consent. |
| Occupational Disease Coverage | Covers occupational diseases contracted by employees as a result of their job duties, subject to specific definitions and exclusions in the policy. |
| Coverage for Temporary and Permanent Disabilities | Offers compensation for both temporary total disability (TTD) and permanent total disability (PTD) resulting from work-related injuries. |
| Rehabilitation Services | Some policies include provisions for vocational rehabilitation services to help injured employees return to work. |
| Death Benefits | In cases where an employee dies due to a work-related incident, the policy may provide benefits to dependents or beneficiaries. |
Additional Coverage of Business Workers Comp Insurance
Along with standard coverage, employee compensation insurance coverage may cover:
- Diseases listed under Schedule III of the Employee’s Compensation Act, such as those caused by exposure to toxic substances.
- Medical surgeries if hospitalisation exceeds 24 hours.
- Protection for contractors and their subcontractors, including their employees.
- Protection against damages or losses resulting from terrorist attacks.
Exclusions of Workmen Compensation Policy
Along with the inclusions, it’s also crucial to remember what workmen compensation insurance policy does not cover. Here’s a list of exclusions that won’t be covered:
- If an employee gets hurt while under the influence of drugs or alcohol.
- Injuries that happen outside the workplace, unless the employee is on duty and following instructions from their boss.
- Any injuries stemming from war, civil unrest, or actions by foreign enemies.
- Occupational diseases that an employee picks up on.
- If someone gets hurt who is not officially covered under this policy or is working outside the insured’s business.
- Medical expenses for treating injuries sustained by an employee.
- If there is an agreement with another party that prevents the insured from recovering costs.
- Any liabilities that come from agreements that wouldn’t normally apply without that agreement.
- Lastly, injuries caused by some employees intentionally hurting themselves or worsening an injury.
Conclusion
So, a workmen compensation policy acts as a safeguard for both the employee and the employer against financial losses in case of any workplace mishaps. From an organisational point of view; for an employee to be productive, he has to be satisfied and happy, and employee compensation insurance coverage does that.
