Workmen’s Compensation Insurance Policy: what is it?
Employees compensation insurance policy also known as a Workmen Compensation Policy 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 employees’ compensation insurance.
Unfortunately, workplace accidents can happen even when you take all possible precautions. 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. 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 Employee Compensation Insurance Act of 1923 established Employee compensation insurance, which serves to both financially safeguard you and aid your employees in such circumstances.
What is the price of an workmen’scompensation insurance policy?
Employee 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.
Employee 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.
What does a Workmen’s Compensation Insurance cover?
- The Workmen’s Compensation policy provides coverage for injuries brought on by illness or made worse by the demands of the job.
- The policy covers injuries brought on by workplace accidents.
- Temporary illness
- Disability (Partial and permanent incapacity)
- Expenses incurred with the company's permission and legal fees
Advantages of Workmen’s Compensation Insurance Policy?
Here are some benefits, why every firm needs to have Workmen’s Compensation insurance policy:
- The covered employer receives compensation for the money owed to employees and their families as a result of accidents or illnesses incurred owing to the nature of the job while they were working for the insured party.
- To satisfy the insured employer's legal obligations under the Workmen Compensation Act of 1923 or under other applicable laws.
- To pay the fees or expenses spent by the insured employer in defending any subsequent claims, with the insurance provider's permission.
How can I pick the best Employees Compensation Insurance Policy?
- Get the appropriate coverage - Your insurance plan should provide the best protection for all of your employees as well as any dangers to your company.
- Select the appropriate optional coverings - It's possible that things like occupational diseases aren't covered by a normal policy, so think about your business's needs and whether they'll be helpful.
- Pick the appropriate insurance sum - Select a workmen’s compensation plan that enables you to alter the insured amount in accordance with the nature of your company and the danger to your employees.
- Examine various policies - While reducing costs is always a good idea for your company, sometimes the Employee compensation policy with the lowest premium isn't the best choice for you. Therefore, compare the features and premiums of various policies to find one that fits your company's needs while remaining reasonably priced.
- Easy claims processing - Claims are one of the most crucial aspects of insurance, so seek for a provider with an easy claims process and a straightforward settlement procedure as it may save you and your organisation a great deal of stress.
- Supplementary service benefits - Many insurance providers also provide a range of extra services, including 24-hour customer support, user-friendly mobile apps, and more.
Q1. In India, is anWorkmen’s Compensationinsurance 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. Who is protected by employee or workmen compensation insurance policy?
A workmen's compensation insurance policy protects employees (including those hired through a contractor but excluding casual employees) who work for any commercial enterprise against damage or sickness caused by an accident that occurs during the course of employment.
Q3. Do contract workers or employees have access to workmen compensation insurance policy?
Contractual employees can be covered as an extension if they are explicitly stated in the policy.