What is Workmen Compensation Insurance Policy?

OkBima 16 Jan 2023
Workmen-Compensation

 

Workers Compensation, also known as Workmen Compensation, is a vital insurance policy designed to protect both employees and employers in the event of workplace injuries or illnesses. A company’s primary responsibility is to provide a safe and healthy working environment. Regardless of the safeguards and preventive measures taken, industrial accidents are unavoidable. In the unfortunate event that an employee suffers a bodily injury (temporary or permanent) or dies while on the job, the employer is legally obligated to compensate the employee under the Employee’s Compensation Act 1923 and subsequent amendments, and the Fatal Accidents Act 1855. The employer is protected by this policy from this statutory liability. In the Indian context, with the advent of a global work environment and increased employee rights awareness, the policy protects employers from costly lawsuits and exorbitant compensation.

 

Why should you buy Workmen Compensation Insurance Policy?

The Workmen’s Compensation policy pays legal compensation to employees or their dependents in the event of an injury or accident at work (including certain occupational diseases) that occurs during the course of employment and results in disability or death and hence it protects you from burning a hole in your pocket. Also, it motivates your employees for the fact that you have got them covered and any injuries that they will sustain in the workplace will be taken care by you.

 

What are the key features of Workmen Compensation Insurance Policy?

The coverage covers an Employer’s statutory obligation for death or bodily injury caused to employees as a result of work-related incidents.
For the following purposes:

1. Injury and Illness Coverage: Provides coverage for injuries and illnesses sustained by employees while performing job-related duties.

2. Medical Expenses: Covers medical treatment, hospitalisation, medications, and rehabilitation costs for injured employees.

3. Lost Wages Replacement: Offers wage replacement to employees who are unable to work due to work-related injuries or illnesses.

4. Death Benefits: Provides financial support to the dependents of employees who lose their lives in workplace accidents or due to job-related conditions.

5. Legal Protection: Protects employers from potential lawsuits by limiting employees' rights to sue for workplace injuries, following a no-fault system. Furthermore, legal charges and expenses spent as a result of our consent Policy can be extended to include medical expenses for essential treatment.

 

What all are included in the Workmen Compensation Insurance Policy?

The Workmen’s Compensation Insurance Tariff governs the workmen’s compensation insurance industry in India (W.C.Tariff). The Tariff distinguishes between two types of insurance:

Type A:

This policy provides indemnity to the Insured in the event that any employee in the Insured’s immediate service sustains bodily injury by accident or contracts disease arising out of and in the course of the Insured’s employment in the Business, and if the Insured is liable to pay compensation for such injury either under

The Workmen’s Compensation Act, 1923, and subsequent amendments of the said Act prior to the date of issue of the Policy, provided that the insurance grantee meets the requirements

The Fatal Accident Act, 1855 of At Common Law and, all costs and expenditures expended in fighting any claim for such compensation with the company’s permission.

Type B:

The Insured is covered by this policy against legal liability under the Fatal Accidents Act of 1855 and at common law. (This policy does not apply to employees who are considered “workmen” under the Workmen’s Compensation Act of 1923, as amended.) The Insured is covered by this policy against legal liability under the Fatal Accidents Act of 1855 and At Common Law. 

 

What are excluded from Workmen Compensation Insurance Policy?

Workmen Compensation Insurance is essential for businesses to provide financial protection to their employees in case of work-related injuries or illnesses. However, it's crucial to understand that not all situations are covered under this policy. We will discuss five common exclusions you should be aware of when considering Workmen Compensation Insurance.

1. Self-Inflicted Injuries:

Workmen Compensation Insurance typically excludes injuries that an employee intentionally inflicts upon themselves. This means that if an employee harms themselves purposefully while at work, the insurance policy will not cover their medical expenses or lost wages.

2. Injuries Resulting from Substance Abuse:

If an employee is injured while under the influence of alcohol or illegal drugs, their claim may be denied. Most Workmen Compensation policies exclude injuries or accidents that occur when an employee is impaired due to substance abuse.

3. Injuries During Commute:

Injuries sustained during an employee's daily commute to and from work are generally not covered by Workmen Compensation Insurance. However, some exceptions may apply if the commute involves company-provided transportation or is an essential part of the job.

4. Injuries from Violating Company Policies:

If an employee is injured while violating company policies, engaging in horseplay, or ignoring safety guidelines, their claim may be denied. Workmen Compensation Insurance typically excludes injuries that occur when employees do not adhere to established workplace rules and regulations.

5. Injuries While Off-Duty:

Workmen Compensation Insurance usually covers injuries that occur during work hours and while performing job-related tasks. Injuries sustained during off-duty hours or while engaging in personal activities unrelated to work are not covered by the policy.

 

Conclusion: 

Understanding the exclusions in your Workmen Compensation Insurance policy is crucial for both employers and employees. Before Buy Workmen Compensation Insurance Policy, it's essential to be aware of the limitations and exceptions. To ensure comprehensive coverage, it's advisable to review your policy carefully and work with an insurance expert to address any specific needs or concerns.

 

 

 

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