Workmen Compensation Act covers unforeseen legal liabilities of an employer that may arise from the employee’s end. It basically covers the legal liability of an employer under the Workmen Compensation Act of 1923, the Indian Fatal Accident Act of 1855, and Common Law if an employee gets injured or gets disabled as a result of the job. Workmen Compensation Policy offers financial compensation to the employee in the event of work-related injuries, accidents, or demise during employment/work.
Reasons to Buy Workmen’s Compensation Insurance
- It protects businesses from lawsuits that can arise related to mishaps with employees.
- Also, it will include temporary and contract employees.
- Both employer and employee get protection.
- In case any injury to an employee occurs, a monthly wage will be provided until the worker returns to work.
- In case of fatal injury on the job, this insurance also covers death benefits.
- It is better to purchase the policy, as fines and penalties are quite higher if a compensation policy is not taken.
Documents Required
| For all types of claims | Permanent disablement claims | Temporary disablement | For fatal claims |
| Duly filled and signed claim form. | Disablement-related medical certificate | Medical certificate related to disablement | Final investigation report |
| Medical bills | Memorandum of agreement as per Workmen Compensation Act between insured and workmen who are injured | Medical bills | Death certificate |
| Compensation record | Post-mortem report copy | ||
| Statement by witnesses | |||
| Form A is to be filled by the insured as per the Workmen Compensation Act. |
Inclusions
- Any injury incurred due to an accident during the course of employment
- Any injury incurred due to a disease or the provoked conditions of the employment
- Partial / Total or permanent disability
- Temporary disability or death
- Legal expenses incurred with the consent of the company
Exclusions
- Non-Fatal Injuries
- The first 3 days of disability are not covered, where total disbursement is less than 28 days.
- Accidents or Injuries occur under alcohol or drugs.
- Injuries that do not cause partial disablement for more than 3 days.
- Liabilities related to employees of contractors.
- The employees who are not considered workers as per the Workmen Compensation Act, 1923.
- Work-related diseases
Amount payable
| Nature of Claim | Amount of Claim |
| Accidental Death | (50%*Age Factor*Wages) or INR 1,20,000, whichever is higher |
| Permanent Total Disability | (60%*Age Factor*Wages) Permanent Total Disability or INR 1,20,000 whichever is higher |
| Permanent partial Disability | Loss of Earning Capacity prescribed by a medical practitioner or based on %disability*age factor*wages |
| Temporary total Disability | 25%* No. of days of absence or disability*wages/15 |
*Central Government notification prescribed that the maximum amount of wages considered for compensation is INR 15000 per month.
Conclusion
“To conclude, the effectiveness of any worker’s compensation policy depends on its ability to provide timely support to injured workers while promoting a sense of safety and accountability in the workplace.”