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A workmen compensation policy offers coverage for the statutory liability of an employer for the death, disability, and bodily injuries of his employees resulting from an accident out of and during the course of their employment. Thus, the employer pay the compensation payable under the Workmen Compensation Act of India, which comes under the ministry of labour & employment.
Workmen Compensation Policy
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What is Workmen Compensation Insurance?
A workmen Compensation insurance policy is a commercial insurance policy that offers coverage for the legal liability of an employer providing compensation to its workmen in case of their death or accident. Also known as employee compensation insurance or labour insurance, this insurance thus appears as an helping hand to an employer in meeting the obligations imposed by the workmen compensation act.
Workmen/Workers Compensation Act in India
The general inclusions under CPM policy are:
The workmen compensation act, 1923 is an employee compensation act that instruct certain classes of employers to pay compensation to their employees or workmen at the time of an accident or injury. This act provide workmen and their dependents to get compensation from their employers at the time of death or an disability. It also instruct employers to pay compensation to their workmen if they contract certain occupational diseases related to that employment. This act provide coverage to labour/people working in factories, plantations, mines, construction works, mechanically propelled vehicles and other kind of hazardous activities. Railway employees are also included in this act.
The employers pay the compensation to the workmen as per their age, nature of his injury and the average monthly salary or wages paid to him. However, in the case of death or disability the rate for minimum and maximum compensation is fixed, subject to timely revisions. In case of workmen's death, compensation is paid to the dependents of the workmen by the employer. The ministry of Labour and Employment in India has established the 'Social Security Division' which frame social security policies for the workmen and ensuring its implementation. It is also responsible for enforcing the workmen compensation act in India.
Necessity of Workmen Compensation/ Labour Insurance?
1. To pay the compensation to employees and their dependents for which the insured employer is legally liable as a result of death or personal injury caused by accidents or any disease contracted due to the nature of work and in the course of employment.
2. To provide a helping hand to the insured employer's liability arising either under the common law or under the laws mentioned in the workmen Compensation Act, 1923.
3. offering coverage for any cost or expenses incurred by the insured employer with the permission/consent of the insurance company in order to defend any additional claims.
Inclusions
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Bodily injury as a result of an accident during the course and scope of employment.
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Bodily injury as a result of a disease or worsened by the conditions of the employment.
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Death or temporary disablement.
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Permanent total or partial disablement.
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Legal costs and expenses incurred with the company's consent.
Add-on Covers in Workmen Compensation Policy
Contractor employees can get the following covers when charged additional premium:
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Tariff rate on total contract amount, if the contract is for labour only.
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If the contract is for labour and materials, labour value will be decided as per merits, subject to a minimum of 75% of the contract amount.
Exclusions in Workmen Compensation Policy
The General exclusions of most of the workmen compensation insurance policies are:
1. Non-fatal injuries.
2. The initial 3 days of disablement and the total disablement is less than 28 days.
3. All the injuries in which partial disablement occurs for not more than 3 days.
4. Injuries that are caused due to war, nuclear, or riot.
5. Injuries that are caused as a result of internal removal of the security device or due to the carelessness of the security device.
6. Accident or injury that takes place under the influence of alcohol or drug.
7. Liabilities faced for the employees of contractors.
8. All the liabilities assumed in an agreement.
9. The employees who does not come under the category of workmen as per 'Workmen's Compensation Act'.
10. All the diseases that are mentioned in part 'C' of 'Workmen's Compensation Act'.
11. Any changes that are done in the statute of the provisions after the commencement of the policy.
Claim Process
The following steps are required for filing claim under workmen compensation insurance:
1. The employer should be immediately be informed regarding the death or disablement of the employee.
2. If the accident takes place in the manufacturing plant, then intimation to the factory inspector is mandatory.
3. The employer needs to collect all the information and documents as per the needs of the insurance provider.
4. The employer needs to deposit all the documents to the insurance provider.
5. The insurer after approving or denying the claim needs to inform the employee regarding the same.
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