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Workmen Compensation Insurance Policy
This policy is a type of commercial insurance policy taken by employers. This is because the employer is legally liable to provide financial compensation to their workmen or their beneficiaries in case of an accident or their death. This liability arises because the employer is supposed to meet the obligations under the Workmen Compensation Act of 1923.
This policy is also known as a Labour Insurance Policy or Employee Compensation Insurance Policy.
Since it is a statutory liability that the employer faces in case of death, disability, or other bodily injuries of his employees as a result of accidents because of or during their employment, it is very helpful to invest in this policy.
What is the requirement for Workmen Compensation Insurance in India?
- The main reason would be to pay the compensation that the insured is legally liable to pay their employees or their dependents in case of accidents, death, or diseases due to or during the employment.
- To show the employer’s ability to fulfill their liabilities that arise out of the common law of Workmen Compensation Act,1923 and any amendments that take place as well.
- Additional claims can also be defended by providing compensation for their legal costs and expenses if consented to by the insurance provider.
Inclusions in a Workmen Compensation Insurance Policy
- Bodily injuries suffered because of accidents due to or during employment.
- Bodily injuries and diseases caused and worsened due to the conditions that the employees work in.
- Death of the employee due to an accident or disease in the period of employment or due to it.
- Permanent total disablement.
- Permanent partial disablement.
- Temporary disablement.
- Legal and other expenses are that are covered under the policy or incurred with the insurance provider’s consent.
- Any other coverage that is clearly stated in the insurance policy documents.
Rider Benefits of Workmen Compensation Insurance
These benefits can also be added by paying an additional premium to the insurance company:
- Tariff rates on total contract amount, for labor-only contracts.
- If a contract is made for labor as well as materials, then the labor value will be decided according to the benefits they receive, which will be a minimum of 75% of the contract amount.
- Medical expenses incurred for the required treatments.
Exclusions in a Workmen Compensation Insurance Policy
- War, nuclear explosions, riots, etc.
- The employer’s liability towards the contractors’ employees unless it is specially declared and covered in the Insurance Policy.
- Any liability that comes about because of an agreement and would not have arisen without the agreement.
- Any liabilities that are not considered as workmen’s liabilities under the Workmen Compensation Act.
- Non-fatal injuries.
- Bodily injuries that don’t cause partial disability for more than 3 days.
- Accidents and injuries suffered under the influence of intoxicating substances.
- Initial three days of disability and the total disability is less than 28 days.
- Injuries caused due to the intentional removal of security devices or carelessness with the devices.
- Death or disability caused due to the intentional actions of an employee.
- Penalties, fines, and interests imposed on the policyholder under any laws or otherwise.
- Any other exclusions that are explicitly stated in the policy document.
Vital Features of Workmen Compensation Insurance
- Any changes that are made to the provisions of the act after the commencement of the insurance period, will not be covered.
- Average clause, indemnity clause and contribution clause apply for a Workmen Compensation Insurance Policy so that neither the employer nor the employee can make a profit from this insurance.
- Several add-ons are available for the policy such as legal and related expenses, medical expenditure, occupational diseases, etc.
- The claim process is easy and settled quickly as it’s a statutory liability.
Advantages of a Workmen Compensation Insurance Policy
- The policy takes care of both the employer.
- As mentioned above, in case of the employer, the insurance policy provides coverage for any financial compensation that has to be given to the employee or his dependents if there is an unfortunate incident of their death or accident. This also ensures that the business operations and profits keep running smoothly, and the reputation of the employer gets protected as well.
- In the case of employees, they can be assured that any kind of risk they face in the workplace will not result in a huge financial strain on them in the future. There are times when the court awards the employee with compensation but the company is not able to pay so this kind of situation will not take place. Hence the policy will secure the financial future of the employee or his dependents.
How to choose the best Workmen Compensation Insurance Policy?
Since there are various insurance providers in the market offering you a Workmen Compensation Insurance Plan, it might be difficult to make a choice as to which one will be the best for you and your employees.
There is also a requirement of the Workmen Compensation Insurance to have jurisdiction in the employer’s business area.
However, the best way to find an approach policy for yourself is from the comfort of your home. You simply need to take assistance from an insurance web aggregator. Any reliable web aggregator will ask you to provide certain details and requirements. Once you fill these details, you will find a number of options of different kinds of Workmen Compensation Insurance Policies and the one best suited for! Then you can go ahead and make an informed decision to buy the policy.
How is a claim settled under a Workmen Compensation Insurance Policy?
- The employer has to be immediately informed in case of an accident or death of the employee.
- The factory inspector or supervisor is also informed immediately in case the accident takes place in a manufacturing unit.
- Then, the employer has to collect all the information and gather all the documents that are required by the insurance company to settle the claim.
- Thereafter, all the details and documents should be submitted to the insurance company.
- The insurer will analyse all the information provided and make a decision to approve or deny the coverage for the claim and inform the same to the employer.
Documents Required in the Claim Process
For all types of claim:
- Properly filled and signed claim form.
- Medical and hospital bills.
- Records of compensation provided.
For permanent disablement claims:
- Medical certificate of the disablement.
- Memorandum of agreement between the employer and the workmen according to the Workmen Compensation Act, 1923.
For temporary disablement:
- Medical certificate of the disablement.
- Hospital and medical bills.
- Death certificate.
- Final investigation report.
- Postmortem report copy.
- Any witness quotes.
Form A given by the Workmen Compensation Act, filled by the employer.