Workmen’s compensation policy provides compensation to the employees or their dependents in case of injury or accident of the employees at their workplace.
These accidents should arise out of and in the course of employment resulting in disability or death.
The compensation under the workmen’s compensation policy would be decided by the labor courts in case of the death of the employee during and in the course of employment. The premium for the workmen’s compensation policy would be paid by the employer to the insurance company.
Workmen’s compensation policy covers the legal liability of the employees under the Workmen’s compensation act 1923 and Fatal accidents act 1855.
There would be certain accidents at workplaces that cannot be avoided by either the employer or the employees and therefore it would make sense to avail a workmen’s compensation policy to provide compensation in case of death or disability of the employees at the workplace.
The workmen’s compensation act directs the employers to pay a certain amount to the employees or their families in case of death or disability of the employees at the workplace arising during and in the course of employment.
To cover this liability, employees can take a workmen’s compensation policy on paying required premiums to the insurance company.
Benefits of Workmen Compensation Insurance Policy
Let us understand how a workmen’s compensation policy benefits the employee and employer: –
- Covers Liability of the Employer:
The biggest advantage of the workmen’s compensation policy is that it covers the liability of the employer towards the employees in case of an accident or death at the workplace.
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Employers can take a workmen compensation policy to pass on their liability to the insurance company. The policy pays for the death and disability of the employees at the workplace arising out of an in the course of employment.
- Provides compensation to the injured:
The other benefit of the workmen’s compensation policy is that it provides compensation to the injured employee or to the family of the employee in case of accidental death of the employee.
Workmen compensation is a statutory liability where the maximum amount of wages would be considered for compensation by the labor court while awarding the compensation to the aggrieved employee.
- Medical expenses:
Workmen’s compensation policy can also be extended to include medical expenses cover. Medical expenses due to any injury at the workplace arising out of and in the course of employment can be covered up to a certain limit or the actuals.
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Actuals is the claim amount that is incurred by the injured employee for treatment without any limit on the claim amount.
In simple words, the entire hospital bill/ actuals would be paid to the employees in case of workmen’s compensation policy.
- Occupational diseases:
Occupational diseases are the illnesses or diseases that are sustained by the employees or workers during their course of employment or due to the nature of the work.
These occupational diseases would develop over a period of time when the worker is exposed to the environment causing the illness or disease.