ADVANTAGES OF WORKMEN COMPENSATION INSURANCE POLICY

Workmen's Compensation Insurance: What Is It?

Workmen's compensation insurance is a sort of insurance policy that is there to offer coverage for your business's employees who are hurt or become incapacitated as a result of their jobs. It is also referred to as workers compensation insurance or employee’s compensation insurance.

Unfortunately, despite your best efforts, occupational accidents can sometimes occur. The fatal accidental incidental rate per 1,000 workers was 0.63% in 2014. By obtaining this insurance, you can compensate your employees without having to lose money on your firm.

For instance, suppose you run a construction company and one of your workers breaks their leg as a result of something falling from a higher level onto them on the jobsite. In India, there were over 8,000 workplace-related accidents between 2014 to 2017. They may file a lawsuit and demand reimbursement from you for your medical costs if you don't carry workers' compensation insurance. Your company may wind up paying a high price for this.

The Workmen's Compensation Insurance Act of 1923 established workers compensation insurance, which serves to both financially safeguard you and aid your employees in such circumstances.

What Types of Businesses Need Workmen’s Compensation Insurance?

Any firm with employees may wish to think about purchasing a worker's compensation insurance policy.According to the 1948 Employees' State Insurance Act, it is really a requirement for enterprises (particularly manufacturing units) with more than 20 workers to carry workers' compensation insurance.

• Contractors and builders employed by construction companies for personnel engaged in the planning, construction, and maintenance of the building
• Contractors and businesses for civil engineering firms
• Companies that manage nuclear mining reactors and other materials
• Any place of business or corporation that hires watchmen.
• Farming businesses that use employees to plant, harvest, and process crops
• If your firm or business contracts with several of its employees.

What Is Covered Under Workers Compensation Insurance?

You and your staff will be safeguarded in case of an accident if you purchase employee compensation policy.

1. Accidental Damage

If any of your employees become hurt physically as a result of an accident that happens while they're working for you.Workmen’s compensation insurance policy offers the treatment amount.

2. Diseases and Illnesses at Work

Employees may occasionally be exposed at work to chemicals or allergens that are unhealthy for them and can make them sick. If they become unwell, this coverage will aid in covering any necessary medical care.

3. Disability Protection

When workplace accidents cause temporary or permanent disability (such as the loss of limbs or vision), this insurance can help cover their medical costs and partially make up for their lost wages.

4. Funeral Benefits

It pays for any funeral expenses and gives beneficiaries death benefits in the tragic event that an employee perishes in a work-related accident.

5. Medical Insurance

Because medical bills might be fairly high, this insurance will pay for any costs associated with treating injuries sustained during the course of employment that result from accidents.

What is the claim process of Workmen’s Compensation Insurance?

To resolve the claim, the following actions must be taken:

• After an incident happens, the insured is required to notify the insurance provider.
• If the accident occurs at the manufacturing facility, the factory inspector needs to be informed right away.
• The claim must then be made in writing and include all necessary documentation.
• A representative from the insurance provider confirms the claim.
• Depending on the outcome of the verification, the insurer may either approve or refuse the claim.

What Are the Benefits of Workmen’s Compensation?

Here Are SomeAdvantages of Employee Compensation Policy That MakesIt Essential for Every Organisation:

1. Insurance Against Legal Liability:

The Workers Compensation Policy was initially created as a compromise between companies and employees. The bosses were sick of having to defend themselves in employee lawsuits. Legal fees can be very expensive in today's environment, and small businesses might not be able to afford them if they are sued without the proper insurance coverage. It provides coverage for legal liabilities.

2. Vocational Rehabilitation Costs:

In the event that an employee is harmed while working on a construction site and is unable to return to his previous line of work, this insurance policy will also cover the costs of retraining him in a different line of work where he may find employment in the future. Retaining an effective team and lowering attrition can be very beneficial for the organisation.

3. Calculating Lost Income and Corresponding Compensation:

This policy unquestionably includes coverage for any employee who suffers a partial or whole disability. However, in some situations where the employee is made jobless for a substantial portion or the rest of their lives due to such a handicap, the employer is also liable for making up the lost revenue. This income liability must also be calculated correctly. Without insurance, an argument between the employer and the employee can arise.

However, this can be avoided because, according to the Workers' Compensation Act, an employer is required to pay a worker's earnings at a rate of 25% every two weeks in the event that a temporary disability keeps him inactive for a brief length of time. In essence, he receives monthly payment equal to half of the lost income. The compensation is determined based on a partial permanent handicap, such as losing an arm, if applicable. The compensation for the wounded employee is then calculated using a formula that takes into account their possible future earnings and divides the percentage of their lost earning capacity by their monthly salary.

4. Including Special Covers

If the employer chooses them, specific insurance policies also offer specialised add-on coverage options. For instance, you can include liability for subcontractors in the coverage you choose, whether or not they are in direct touch with you. Some plans also cover employee illness or disability brought on by terrorist acts while they are at work.

5. Comprehensive Inclusion of All Employees:

All employees are fully covered by the policy, not only those who perform labour. Every single employee will be covered beginning on the day the policy goes into effect. Additionally covered by the Workmen’s Compensation Act of 1923 are the claims made under the Fatal Disability Act of 1855.

Therefore, a workmen's compensation insurance coverage is a crucial component of any company. As it benefits both the company and the employee, it is bilinear. Only the top organisations are aware of the aforementioned advantages, which guarantee that any organisation will apply this policy to its fullest potential.

What Is the Price ofa Workmen’s Compensation Insurance?

Employees Compensation Insurance premiums are determined by the likelihood that your company may be subject to an employee injury claim and the potential financial impact of that claim. A manufacturing facility will have a greater rate than, say, a store selling beauty supplies because this amount is based on the type of business you run.

Workmen's compensation premiums are determined by a number of important criteria, such as:

• The nature of your company's operations; for instance, a factory setting will put your staff at greater risk than an office.
• The quantity of employees.
• The particular work that they do (workers are categorised).
• The wages or salaries you pay your staff.
• The place where your company is located.
• The safety requirements that your company complies with.
• The previous complaints made by your company's employees.

FAQs

Q1. In India, is a workmen's compensation policy required?

According to the Employees' State Insurance Act of 1948, Workmen's Compensation Insurance is a requirement for all businesses (including manufacturing units) with more than 20 employees in order to provide insurance coverage for workers or employees.

In order to comply with the Workmen's Compensation Insurance Act of 1923 and the Indian Fatal Accidents Act of 1855, employers and businesses with fewer than 20 employees must still have this insurance.

Q2. What documents are required to claim workmen compensation policy insurance?

For quick and easy approval of the workmen’s compensation insurance, following documents must be submitted:

• Duly filled in claim form
• Medical bills, in case of injury
• Statement provided by the injured
• Compensation records for previous claims
• Death certificate, in case of employee’s death
• Post-mortem report, in case of employee’s death
• Medical certificate, in case of permanent disability
• Memorandum of agreement according to the Employees’ Compensation Act, 1923

Q3. How is compensation calculated under Workmen Compensation Insurance Policy?

• In case employee passes away
• Half of their weekly salary (based on relevant factors like age).
• Up to 5,000 in funeral costs.
• 1,40,000 is the bare minimum settlement amount.
• {an amount equal to fifty per cent. of the monthly wages of the deceased *[employee] multiplied by the relevant factor; or an amount of *[one lakh and twenty thousand rupees], whichever is more;}

• If the worker had a total and permanent disability (like loss of eyesight).
• 60% of their gross monthly income (based on relevant factors like age).
• 1,20,000 is the bare minimum settlement amount.
• {where permanent total disablement results from the injury : an amount equal to sixty per cent. of the monthly wages of the injured *[employee] multiplied by the relevant factor; *[one lakh and twenty thousand rupees], whichever is more;}
• If the worker has a partial handicap that is permanent
• Depending on how much their earning ability has been diminished, a proportion of the employee's salary is determined.
• If a worker is temporarily disabled.
• Applicable if the worker or employee is unable to work for more than three days in a row.
• 25% of their gross monthly income (paid every half month).
• Five years is the maximum compensation period.

Q4. What Insurance Companies available on Quickinsure platform?

We offer you access to top insurance companies including –

• HDFC Ergo
• Reliance Digital Insurance (Reliance General Insurance)
• Bajaj Alliance
• Digit
• Tata AIG Insurance(ICICI Lombard General Insurance)

Q5. To whom does workmen's compensation insurance apply?

A workmen's compensation policy protects employees (including those employed through a contractor but excluding casual employees) who are engaged by any commercial enterprise against any injury caused by an accident that occurred during the course of employment, as well as against certain occupational diseases.

Q6. Do contract employees or labourers receive workers compensation insurance coverage?

If they are explicitly mentioned in the policy, contract workers may be covered as an extension.