What is the Workmen’s Compensation Policy?
In India, the Workmen’s Compensation Policy is a government mandate policy that was introduced on 5th March 1923 under the Workmen’s Compensation Act 1923. Workmen compensation policy is also called workers’ compensation insurance or employee compensation insurance). It protects the company from risks like accidents or damage and the death of an employee while on the job.
This policy helps the company and its labor in a financial way. This policy is more effective for workers as it provides cash benefits and hospitalization expenses/ health care or both to a worker for injury or illness while they are at work.
Why you should get a Workmen’s Compensation Policy?
Important reasons that every employer should know why you to buy this policy:
- 1. Workmen’s Compensation Policy provides financial support to you and your worker against injury or fatal accidents of your workers.
- By Buying this policy your company will be having a clean chit to all kinds of lawsuits because it covers your employee’s accidents during work.
- 3. Most important this policy is mandated by the government, by buying this you will protect your company under the Workmen’s Compensation Act, 1923.
- 4. Workmen’s Compensation Policy will give you additional protection if your employee files an additional claim for his/her accident.
Example for better understanding
Suppose your employee gets injured or has an accident during their work; they will need health care and financial support from your company. In this case, this policy gives you financial support and covers your company with all legal expenses.
Workmen’s Compensation Act, 1923
This act was passed by the Indian Government to protect workers against any disease or injury during employment in an organization.
According to this act, the employer has to pay the employee in case of any injury/disease due to any accidents or mishaps while working. This act also mandates the employer to compensate for the disablement/death of the worker while working in the organization.
This act makes the employer compensate the injured employee because the injury impacts the earnings capacity of the employee.
Inclusion & Exclusion under workmen compensation policy.
- 1. Coverage of an occupational disease or illness.
- 2. Temporary or permanent disability of a worker due to a work accident.
- 3. Death benefits for an unfortunate death or fatal accident of a worker while working.
- 4. Injuries and accidents of a worker while at work.
- 5. Covers hospitalization expenses, medication costs, etc., of the worker.
What’s not covered?
- Any injury or accident caused outside the workplace.
- According to the law, if an employee is not called a ‘Workmen’ they will not be covered.
- It Doesn’t cover minor injuries.
- Workers of contractors.
- The initial 3 days of disability of a worker will not be covered where total disablement is lesser than 28 days.
- Accidents or injuries caused due to alcohol or drugs.
- Injuries caused by war, riots, and self-injuries.
- Accidents or injuries caused by workers violating safety rules and regulations.
Sub-contractors cover: If an employer hires a sub-contractor for the manpower (workers), and the sub-contractor does not have a workmen compensation policy, in that case, you will be relieved by the sub-contractor’s add-on cover.
Medical Extension: An employer can buy this add-on, but this add-on cover is applicable when the workmen must have been hospitalized for more than 24 hours.
Terrorism cover: Terrorism cover is applicable only when there is damage or loss due to a terrorist attack.
Top companies providing Workmen’s Compensation Insurance
|Company Name||Plan Name|
|Go Digit General Insurance||Digit Employees Compensation Insurance Policy|
|TATA AIG General Insurance||Employers’ Liability Policy|
|HDFC ERGO||Employees Compensation Insurance|
|ICICI Lombard||Workmen Compensation Insurance|
|IFFCO Tokio General Insurance||Workmen’s Compensation|
|Bajaj Allianz General Insurance||Employees Compensation Insurance Policy|
|Kotak Mahindra General Insurance||Kotak Employees compensation Insurance|
|Reliance General Insurance||Employee’s Compensation Insurance Policy|
How does the Workmen’s compensation policy function?
This policy helps the employer to compensate employees under the following conditions:
- If the employee gets injured while working in the organization.
- Disablement (Permanent/temporary) due to work-related injury.
- Death from the injury while working.
- Occupational disease (Disease developed due to employment)
This policy also covers the organization’s legal liability in case of any lawsuit due to the above conditions.
Businesses that need Workmen Compensation Policy in India.
- If Your business involves Construction, Manufacturing.
- If Your business involves an Animal shelter house or nursing care.
- If Your business involves many employees, e.g., IT companies and consulting firms.
What factors to look at before buying the Workmen’s Compensation policy?
Going through important terms/factors affecting your policy is very necessary. So, let’s see what factors you need to look at.
Right Coverage: Choosing the policy with the right coverage for your company’s risk and all your employees/workers.
Right Add-ons Covers: The standard policy may not cover benefits like occupational diseases. It would be best if you bought add-ons that will benefit your business and you.
Better Sum Insured: While buying a workmen’s compensation policy, you must buy a policy that allows you to customize the sum insured according to your business need.
Compare policies: The policy you choose for your company must be affordable and effective. So you must compare various policies’ benefits/features and premiums from lowest to highest and choose the best option suitable for your business.
Claim Process: The most important part of a policy is the claim. You must go for a company with the highest claim settlement and a trusted company in the industry, as it will save your business time and inconvenience.
Extra Services: Companies give a lot of extra services like 24*7 customer assistance, user-friendly apps, and more.
How to buy Workmen’s Compensation Insurance online?
Step 1: Visit Shadetreeinsurance.com
Step 2: Click on the Products tab and go to Business Insurance.
Step 3: Click on Workmen’s compensation insurance.
Step 4: Fill up the required details in the premium calculator.
Step 5: Different workmen’s compensation insurance plans will be displayed on the screen. Choose the best plan among them.
Step 6: Select the required add-ons.
Step 7: Pay the premium.
Your policy will be created. You will get the policy documents via registered mail ID.
Documents required to buy Workmen Compensation Policy
- Duly filled proposal form
- KYC documents of the organization
- Employee records showing the number of employees in respective duties.
- The average salary of the employees
You may need other documents as per the requirement.
Claim procedure to file a claim
To raise a claim for the workmen’s compensation policy, you need to follow below steps:
Step 1: If any accident happens in the factory, the employer(You) must inform the factory inspector.
Step 2: The employer(you) must send a written notice and inform the insurance company about any workmen’s accident/injury or death.
Step 3: The insurance company will appoint an investigator to cross-check the situation for which the claim has been raised.
Step 4: Gather all the information and documents as evidence for the insurance company, as it may require.
Step 5: The employer(you) must submit all documents and the claim form.
Step 6: Depending on the investigator’s verification, the claim may be approved or refused.
Documents Required to file a claim for the workmen’s compensation policy.
Documents for all kinds of claims:
- The claim form must be duly filled out and signed.
- Medical bills of injured workmen.
- Any records of previous compensation.
Documents for permanent disability claims:
- Medical certificate related to a permanent disability of workmen.
- Memorandum of Agreement between employer and injured workmen as per the Workmen’s Compensation Act 1923.
Documents for temporary disability claims:
- Medical certificate related to the temporary disability of workmen.
Documents for fatal accident claims:
- Death certificate of the workmen.
- Post-mortem certificate of the workmen.
- Form A to be filled as given by the Workmen Compensation Act.