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How Does Workmen's Compensation Insurance Work?

Posted on 31 May 2021
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With the employees exposed to numerous workplace hazards and threats of workplace-related injuries, it becomes essential for employers to ensure that their employees stay protected with the Workmen’s Compensation Insurance Policy. This ensures that in the event of the employee’s injury, death, or any disability, the employer is able to cover the statutory liability and financial obligations with the help of the compensation policy.
Let us learn more about the Workmen’s Compensation Insurance Policy and how it works:

Workmen's compensation insurance coverage details

What is Workmen’s Compensation Insurance Policy?

The Employee’s Compensation Act, 1923, was implemented to provide social security by employers to their employees facing risks and health hazards at their workplace. A workmen’s compensation insurance policy helps the employers cover these statutory liabilities and provide a protection to his/her employees against the risks of workplace hazards.
It is recommendable for the employees falling under following categories must avail the workmen’s compensation policy:

  • People working in factories
  • People working in plantations
  • People working in mines and construction sites
  • People working with mechanically propelled vehicles and indulging in other hazardous activities

Workmen’s Compensation Insurance Coverage

The Workmen’s Compensation Insurance Policy’s main aim is to help the employers bear the prescribed compensation for the injury, accident or death of the employee. In case of prolonged treatment, the employer can choose to take the policy with medical extension cover by paying an additional premium to cover the medical expenses borne by employer for the treatment of employee.
The workmen’ compensation helps cover the following:

  • Temporary disability
  • Permanent disability (partial or total)
  • Medical expenses incurred due to treatment
  • Death of an employee

Benefits of Workmen’s Compensation Policy

The workmen’s compensation insurance policy protects the interests of the employees since the employer has to pay the cost of premium towards the policy.
According to the Employee’s Compensation Act, 1923, the employer or contractor is legally bound to pay the compensation to employees involved in any workplace mishap.
The employer or contractor also thus needs buy workmen’s compensation insurance policy. The policy premium is based on the count of employees, employee’s risk occupancy or profile, respective wages, and the previous number of claims that have been compensated etc.

Filing a Claim for Workmen’s Compensation Policy

The process for availing workmen’s compensation insurance claim is very simple:

  • The employer must be notified immediately about the employee’s injury, accident or death
  • In case of an accident at the workplace, the employer should be intimated immediately
  • The employer needs to submit all the information and documents as requested by the insurance provider namely:
    • Duly filled and signed claim form
    • Nature of claim
    • Medical bills
    • Compensation records
    • In case of death:

    • Death certificate
    • Final investigation report
    • A copy of the post-mortem report
  • Depending on the online feasibility provided by the company, the copies of the above-mentioned documents can also be submitted through the web intimation/email.
  • After reviewing the claim, the information and documents provided, the insurer may either deny or approve the claim request. Subsequently, they notify the insured of the same.

Workmen’s Compensation Policy Exclusions

The workmen’s compensation policy excludes following criteria:

  • Injuries/ accidents outside of workplace
  • Injuries/accidents/deaths due to alcohol / drug consumption
  • Injuries/accidents/deaths of non-employees
  • Employer shall not be so liable in respect of any injury which does not result in the total or partial disablement of the employee for a period exceeding three days

In Conclusion

Every workplace or organisation has to ensure their employee’s safety and overall healthy work atmosphere. For businesses, injured or disabled employees are considered as financial liability. Therefore, Employee’s compensation insurance policy is a major business insurance that all organisations must have in order to cope with financial obligations and liabilities and at the same time provide their employees the security and compensation that they deserve.

  • Workmen’s Compensation Insurance Policy
  • Product Code: 4010
  • Product UIN: IRDAN115CP0017V01201920

Help us know you better!

This contains only an indication of the cover offered. For complete details on risk factors, terms, conditions, coverages and exclusions, please read the sales brochure carefully before concluding a sale.ICICI trade logo displayed above belongs to ICICI Bank and is used by ICICI Lombard GIC Ltd. under license and Lombard logo belongs to ICICI Lombard GIC Ltd. ICICI Lombard General Insurance Company Limited, ICICI Lombard House, 414, Veer Savarkar Marg, Prabhadevi, Mumbai – 400025. . IRDA Reg.No.115. Toll Free 1800 2666. Fax No – 022 61961323. CIN (L67200MH2000PLC129408). (Workman Compensation, 4010 , IRDAN115CP0017V01201920)