Workmen Compensation (WC) Policy
Workmen Compensation Insurance covers employers’ liability for work-related injuries or diseases, providing medical care and wage compensation for employees.
- Coverage for employee death, disablement, and medical expenses
- Includes payroll, contractors, and subcontractors
- Minimal cost compared to potential liability
What is Workmen Compensation (WC) Insurance?
Workmen Compensation (WC) Insurance, also known as Employee Compensation Insurance, is a type of insurance policy that provides coverage to employers for their legal liability to pay compensation to employees for work-related injuries or occupational diseases. This policy is designed to protect both the employer and the employee, ensuring that injured workers receive medical care and compensation for lost wages while protecting employers from potential lawsuits.
What is covered under Workmen Compensation (WC) Insurance?
Medical Expenses
Covers medical treatment costs for work-related injuries or occupational diseases.
Disability Benefits
Provides compensation for temporary or permanent disability resulting from workplace injuries.
Death Benefits
Compensation to the family of an employee who dies due to a work-related injury or illness.
Wage Replacement
Covers a portion of lost wages if an employee is unable to work due to a work-related injury or illness.
Legal Costs
Covers legal expenses incurred in defending against claims made by employees under the WC Act.
Occupational Diseases
Covers diseases contracted due to employment in the business, including those listed under Schedule III of the Employees Compensation Act 1923 (as specified by Go Digit and NIC policy documents).
Conditions for Coverage under Workmen Compensation (WC) Insurance
Employment Relationship
The injured person must be an employee of the insured.
Work-Related Injury or Illness
The injury or illness must arise out of and in the course of employment.
Notification
The employer must notify the insurance company promptly about any work-related injury or illness.
Record Maintenance
The insured must maintain accurate records of employees and wages and permit the insurer to inspect these records (as per NIC and Go Digit policies).
Conditions for Coverage under Workmen Compensation (WC) Insurance
Employment Relationship
The injured person must be an employee of the insured.
Work-Related Injury or Illness
The injury or illness must arise out of and in the course of employment.
Notification
The employer must notify the insurance company promptly about any work-related injury or illness.
Record Maintenance
The insured must maintain accurate records of employees and wages and permit the insurer to inspect these records (as per NIC and Go Digit policies).
What are the exclusions under Workmen Compensation (WC) Insurance?
Intentional Injuries
Injuries caused intentionally by the employee are not covered.
Self-Inflicted Injuries
Injuries resulting from self-harm or suicide attempts are excluded.
Non-Work-Related Injuries
Injuries or illnesses not related to work activities are not covered.
Violation of Law
Injuries resulting from the employee’s violation of law or safety regulations.
Under Influence of Drugs/Alcohol
Injuries occurring while the employee is under the influence of drugs or alcohol.
Contractual Liability
Any liability assumed under a contract not specifically covered by the policy.
War, Nuclear, and Riot
Injuries due to war, nuclear risks, or civil disturbances (as specified by Go Digit and NIC policies).
Occupational Diseases
Unless specifically agreed and mentioned in the policy schedule (as per Go Digit policy).
Accidents Outside Employment Place
Injuries occurring outside the specified place of employment unless the employee was on duty (as per Go Digit policy).
Why Companies Need Workmen Compensation Insurance?
In an increasingly working environment, the possibility of death or bodily injury to any employee during the course of employment cannot be ruled out. Employee rights under the law have advanced significantly, and in the corporate world, better communication ensures that significant liability will fall on the employer in such circumstances.
Therefore, it is always important for every employer to cover such uncertain liabilities as they can be very significant in quantum. Additionally, the cost of such insurance is minimal compared to the potential liability.
Key Features on Workmen Compensation (WC) Policy
Death
Permanent Total Disablement
Permanent Partial Disablement
Leave Benefit: During the loss of salary under the medical recovery period.
Medical Expenses
Coverage for Payroll Employees, Contractors, and Subcontractors: Ensures all workers, including those employed indirectly, are covered.
Key Features on Workmen Compensation (WC) Policy
Death
Permanent Total Disablement
Permanent Partial Disablement
Leave Benefit: During the loss of salary under the medical recovery period.
Medical Expenses
Coverage for Payroll Employees, Contractors, and Subcontractors: Ensures all workers, including those employed indirectly, are covered.
Key Suggestions to Make the Best Workmen Compensation (WC) Insurance Plan
Assess Workplace Risks
Understand the specific risks and hazards associated with your workplace.
Choose Comprehensive Coverage
Select a policy that covers a wide range of potential workplace injuries and illnesses.
Compliance with Legal Requirements
Ensure the policy complies with local laws and regulations regarding workmen compensation.
Clear Communication
Inform employees about the coverage and how to report work-related injuries or illnesses.
Regular Policy Reviews
Periodically review and update the policy to ensure it meets the evolving needs of the business and workforce.
Key Suggestions to Make the Best Workmen Compensation (WC) Insurance Plan
Assess Workplace Risks
Understand the specific risks and hazards associated with your workplace.
Choose Comprehensive Coverage
Select a policy that covers a wide range of potential workplace injuries and illnesses.
Compliance with Legal Requirements
Ensure the policy complies with local laws and regulations regarding workmen compensation.
Clear Communication
Inform employees about the coverage and how to report work-related injuries or illnesses.
Regular Policy Reviews
Periodically review and update the policy to ensure it meets the evolving needs of the business and workforce.
Frequently Asked Questions
What is the maximum wage as per the latest amendment under the Employee Compensation Act?
As per the latest amendment, the maximum wage for calculating compensation is Rs 15,000 per month.
How is the premium for a Workmen Compensation (WC) Policy determined?
The premium is determined based on the number of employees, nature of work, wage levels, claim history, coverage limits, and industry type.
Who comes under the definition of employees as per the WC Act?
According to the Employee’s Compensation Act, 1923, the following categories of persons are included in the definition of employees:
- Railway Servants: Not permanently employed in any administrative, district, or sub-divisional office of a railway and not employed in any capacity specified in Schedule II.
- Crew Members: Includes masters, seamen, or other members of the crew of a ship, captains, or other members of the crew of an aircraft, and persons recruited as drivers, helpers, mechanics, cleaners, or in any other capacity in connection with a motor vehicle.
- Persons Employed Abroad: Includes persons recruited for work abroad by a company and employed outside India.
- Factory Workers: Employed in any premises where a manufacturing process is being carried out.
- Mine Workers: Employed in any mine as defined in the Mines Act.
- Explosive Handlers: Employed in the manufacture or handling of explosives in connection with the employer’s trade or business.
- Other Specified Employments: Any person employed in any other capacity as specified in Schedule II of the Act.
Q: Under what circumstances are employees or their dependents entitled to receive compensation under the Workmen Compensation Act?
A: Employees or their dependents are entitled to receive compensation under the Workmen Compensation Act in the following circumstances:
- Personal Injury by Accident: When an employee sustains personal injury caused by an accident arising out of and in the course of employment.
- Occupational Diseases: When an employee contracts an occupational disease peculiar to the employment, specified in Schedule III of the Act.
- Death: When an employee dies as a result of an accident or occupational disease arising out of and in the course of employment.
- Total or Partial Disablement: When an employee suffers from total or partial disablement due to an accident arising out of and in the course of employment.
How does the claim under a WC Policy get processed?
- Immediate Notification: Notify insurer and Employee Compensation Commissioner immediately.
- Documentation Completion: Complete necessary documentation as per Commissioner’s and insurer’s requirements.
- Commissioner’s Order: Provide Commissioner’s order on compensation to the insurer. The insurer or employer deposits compensation to the Commissioner’s forum.
- Direct Processing for Wages and Medical Reimbursement: Claims for loss of wages and medical reimbursement may be processed directly by the insurer.
How is compensation calculated under the Employee Compensation Act in the event of death?
Compensation is 50% of the employee’s monthly wages multiplied by the relevant factor based on age, subject to specified limits.
How is compensation calculated under the Employee Compensation Act in the event of Permanent Total Disability?
Compensation is 60% of the employee’s monthly wages multiplied by the relevant factor based on age, subject to specified limits.
How is compensation calculated under the Employee Compensation Act in the event of Permanent Partial Disability?
Compensation is based on the percentage of loss of earning capacity, calculated as a proportion of compensation for Permanent Total Disability.
How is compensation calculated under the Employee Compensation Act for loss of wages during recovery?
Employees receive half-monthly payments equivalent to 25% of their monthly wages during temporary total disablement.
How is medical expense reimbursement handled under the Employee Compensation Act?
Covers all necessary medical expenses incurred for treating a work-related injury or illness, with full reimbursement for necessary treatment.
Is an employer liable under the WC Act for their employees who are covered under ESIC?
No, an employer is generally not liable under the WC Act for employees covered under the Employees’ State Insurance Corporation (ESIC).
Are part-time workers covered under the WC policy?
Yes, part-time employees, as well as contractor and subcontractor employees, may also be provided coverage under a Workmen Compensation (WC) policy.
Are contractor or subcontractor employees covered under the WC policy?
Yes, contractor and subcontractor employees may also be provided coverage under a Workmen Compensation (WC) policy.
Secure Your Workforce, Protect Your Business
Ensure employee well-being with Workmen Compensation Insurance from Go Insure India. This policy covers employers’ liability for work-related injuries or illnesses, providing medical care and wage compensation while protecting businesses from financial and legal risks.