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Rapid strides have been made in achieving better rights for employees in today’s increasingly global environment. However, the threat of expensive lawsuits and large compensation pay-outs can seriously affect a company’s profitability and future. That’s why it is vital for organisations to ensure protection with HDFC ERGO General Insurance’s Workmen’s Compensation/Employer’s Liability Insurance.

What is Workmen’s Compensation Insurance?

It is compensation payable under a scheme set out in the Workmen’s Compensation Act of India, monitored by the Ministry of Labour. The policy covers statutory liability of an employer for the death of or bodily injuries or occupational diseases sustained by workmen in the Insured’s immediate service and arising out of and in the course of employment. Costs or expenses incurred by the insured employer, with the consent of the company, to defend any claims are paid in addition.

What is Employer’s Liability Insurance?

This covers an employer’s liability for bodily injury to employees occurring within the scope of their employment when that liability is not covered by worker’s compensation.

Relevant statues and laws under WC/EL policy:

The policy covers legal liability of an employer under:

Workmen’s Compensation Act, 1923, and subsequent amendments of the said Act prior to the date of issue of the policy. Indian Fatal Accidents Act, 1855, and subsequent amendments of the said Act prior to the date of issue of the policy. Common Law.

Who needs these policies?

Any employer, whether as a principal or contractor, engaging “workmen” as defined in the Workmen’s Compensation Act. Any employer of employees who do not qualify as “workmen” but share an employee-employer relationship.

Policy pays for Claims arising from:

Death Permanent total disablement. Permanent partial disablement. Temporary disablement. Legal costs and expenses incurred with the company’s consent.

Policy does not pay for claims arising from:

Any injury which does not result in fatality or partial disablement for a period exceeding 3days. The first 3days of disablement where the total disablement is less than 28 days. Any non-fatal injury caused by any accident directly attributed to: i] Influence of drinks or drugs. ii] Willful disobedience of an order for securing safety to the workman. iii] Willful removal or disregard of a safety guard device. War group and nuclear group of perils. Liability to employees of contractors of the Insured (unless separately declared and covered). Liability of the Insured assumed under an agreement. Diseases mentioned in Part ‘C’ of Schedule III of the Workmen’s Compensation Act , 1923. Any change in statute provisions after the policy has commenced.

Extensions available at additional premium:

Actual medical, surgical and hospital expenses including the cost of transport to hospital for accidental employment injuries. Any compensation for diseases mentioned in Part ‘C’ of Schedule III of the Workmen’s Compensation Act , 1923, which arises out of and in the course of employment.

Cost of Insurance:

This policy is governed by the Workmen’s Compensation Insurance Tariff (W.C.Tariff). However, the premium rate depends on the industry class and nature of work carried on by the employees. Rates are applied on the employees’ estimated annual gross wages/salaries. (the Sums Insured under the policy) and adjusted at the end of the policy period on submission of the statement of wages paid during the period.

The tariff provides for two types of insurance as follows:

Table A: Indemnity to the Insured under the Workmen’s Compensation Act, 1923, the Indian Fatal Accidents Act, 1855, or at Common Law.

Table B: Indemnity to the Insured against their legal liability under the Indian Fatal Accidents Act, 1855, and at Common Law. This policy is not issued to cover employees who fall within the definition of “workmen” under the Workmen’s Compensation Act, 1923.

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