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Workmen Compensation Insurance

A serious injury at work can change everything for an employee, from their ability to earn a living to the well-being of their family. For employers, this brings the responsibility of offering support during difficult times, both morally and legally.

As per the Workmen’s Compensation Act of 1923, if your business involves physical labour or operational work and is not covered under the Employees’ State Insurance (ESI) Act, you are legally required to compensate affected employees. The financial compensation is applicable in case of a workplace-related injury, illness or death.

TATA AIG’s Workmen’s Compensation Insurance is designed to help employers fulfil this responsibility. It covers medical expenses, lost wages and compensation for permanent or temporary disability caused by work-related accidents. This not only ensures that affected employees are supported but also helps businesses stay legally protected.

With our TATA AIG Employee’s Compensation Policy, you can:

  • Hassle free buying process
  • Benefit from instant policy issuance
  • Ensure quick, transparent and hassle-free claim settlements
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What is Workers’ Compensation?

Workers’ compensation is financial support given to employees who cannot work because of an injury or illness at the workplace. It helps them manage daily expenses by covering part of their lost income.
The amount paid depends on how serious the injury or disability is. This policy also applies to contract or temporary workers.

It offers coverage in the case of:

  • Death
  • Permanent total disability
  • Permanent partial disability
  • Temporary disability

Suppose an employee is unable to work for a while due to a workplace injury. In that case, the workmen’s compensation policy (WC policy) ensures they still receive a portion of their regular salary during their recovery.

The Added Advantage:

In addition to providing financial support, a workmen’s compensation policy may also cover the cost of medical treatments. This can include healthcare services and occupational therapy needed for recovery. Medical coverage can be further extended using the medical cover or medical extension cover add-ons.
This ensures that employees do not have to take the financial burden of medical expenses resulting from workplace accidents.
The coverage and benefits available under the policy are based on the guidelines of the Workmen’s Compensation Act (WC Act).

What is the Workmen’s Compensation Act?

The Workmen’s Compensation Act of 1923 lists guidelines and rules related to financial protection for workers who suffer injuries due to work-related accidents. Post the 2010 amendment, the WC Act is now known as the Employees’ Compensation Act, 1923.

It requires employers to compensate employees for injuries, illnesses or deaths caused out of and in the course of employment. Employees who are not covered under the Employees’ State Insurance (ESI) Act can only be covered under this Act.

Key Provisions

  • Employer’s Liability- The employer is responsible for compensating their employees for the loss of income due to disabilities or death resulting from workplace accidents.

  • Eligible Employees - The Act specifies the industries and types of employees eligible for compensation, such as construction workers, ship crew members and drivers.

  • Amount of Compensation- The Act specifies the method of calculation for the amount of compensation for various disabilities and death.

  • Exemptions - The Act specifies exclusions, such as neglecting safety rules, being under the influence of alcohol or drugs, etc.

Refer to The Workmen's Compensation Act of 1923 for more details and key updates.

Updates in the Workmen Compensation Act 1923

Since its inception in 1923, the Workmen’s Compensation Act has undergone significant updates to better serve employees. These updates aim to improve the protection and benefits provided to employees, ensuring they receive fair and adequate compensation for their contributions and risks in the workplace.

The two major changes are:

1

Name Change in 2010

In 2010, the law's name was changed from the Workmen’s Compensation Act to the Employee’s Compensation Act. This change was made to reflect a more inclusive and modern approach, recognising all employees rather than just workmen.

2

Increase in Compensation Amount in 2020

On 3rd January 2020, the Ministry of Labour and Employment made a significant update to the Act. The amount on which compensation is calculated was raised from ₹8,000 to ₹15,000.

This means that the basis for calculating compensation amounts has nearly doubled, ensuring better financial support for employees and their families in case of workplace injuries or fatalities.

Types of TATA AIG Workmen’s Compensation Policies

Basic WC Policy

It provides basic coverage to compensate for the employee’s loss of income due to workplace accidents that lead to disabilities or death.

WC Policy with Medical Cover

On the Basic WC policy, you get coverage for medical expenses incurred during the treatment of work-related injuries.

WC Policy with Medical Extension Cover of ₹25,000

On the Basic WC Policy, you get a medical extension cover of ₹25,000. It can be used to cover minor or moderate work-related injuries.

Why do you need a Workmen’s Compensation Policy?

Certain classes of employers (as listed in the above section) are legally obliged to compensate employees for work-related injuries.

Employers who fail to compensate the employees under the WC Act may have to face court trials and pay hefty penalties.

The WC policy provides financial support when a work-related injury affects an employee’s regular income.

A single WC policy allows employers to cover employees’ disability, medical expenses, work-related illnesses and death.

By meeting legal obligations, employers can be stress-free and can focus on their business operations.

By providing timely financial support to their employees, employers can prevent problems with employee unions.

In addition to full-time workers, the WC policy can also cover temporary and contract workers.

Contractors are more likely to release payments on time when they know that the WC policy protects their workers.

WC Policy Benefits

A few important workmen's compensation benefits are as follows:

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Enhances brand image

Prioritising employee safety and well-being helps build trust in your company among both employees and clients.

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Promotes workplace safety

Employers improve workplace safety standards to reduce accidents.

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Online purchase

Employers can purchase the workmen’s compensation policy online in a few simple steps.

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Streamlined claim settlement

The steps to initiate a claim and the process of claim settlement are streamlined.

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Extensive coverage

A workers’ compensation policy provides extensive coverage that can cover a large workforce.

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Inclusive coverage

The policy can cover different degrees of disabilities and diseases and their medical treatments.

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Add-ons

Employers can include add-ons, such as for medical extension cover and occupational diseases, under employee’s compensation insurance.

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Flexibility

The WC policy offers the option to customise the coverage based on the number of employees and policy tenure.

What Does Workmen’s Compensation Insurance Cover? (Inclusions)

  • In the event of the employee’s death, financial compensation is offered to the employee’s beneficiaries.

  • Covers bodily injuries caused due to an accident at the workplace.

  • Covers permanent partial and total disabilities due to workplace accidents that reduce the employee’s earning capacity.

  • The policy also covers temporary partial and total disabilities caused by workplace accidents that affect the employee’s ability to earn.

  • The WC policy covers medical treatment expenses for work-related injuries or diseases.

  • Illnesses developed due to working in harmful conditions over time are covered under an add-on.

  • The policy also covers the legal and approved expenses involved in claim settlements.

Please Note: The inclusions can differ for individual cases. Please refer to the WC policy document for the detailed inclusions and policy conditions.

What Does Workmen’s Compensation Insurance Not Cover?

Injuries from negligence and misconduct

Accidental injuries after consuming alcohol or drugs, neglecting safety rules, and intentionally removing or ignoring safety devices.

Occupational diseases

Illnesses developed due to working in hazardous work conditions over a long time are excluded unless covered by the policy.

Injuries caused outside the work environment

Accidents that occurred outside the workplace unless the employee was there on duty for the business.

Injuries to employees employed by contractors

Injuries to persons employed by a contractor or sub-contractor of the insured, unless specifically covered in the employees’ compensation policy schedule.

Injuries to unspecified employees

Injuries suffered by a person who is not declared eligible for insurance under the WC Act or this policy.

Injuries that do not meet disability conditions

Injuries that do not cause partial or total disablement for more than three days.

Medical treatments

Medical expenses for treating any injury unless specified under the policy.

Interest and penalty (for the employer)

Interest and/or penalties imposed on the insured under any law or otherwise.

Agreement-based compensation

Payments to be made by the employer based on their agreements but not legally compulsory are not covered.

Injuries due to war

Injuries or illnesses due to war, enemy attacks, civil war, rebellion, or military actions.

Please Note: This is a general list of exclusions. Please refer to the policy document for detailed exclusions before purchasing the policy.

Types of Workers’ Compensation Insurance Coverage

For Wage Replacement

The amount of compensation under the WC policy depends on the extent of the disability and its impact on the employee’s earning capacity.

  • Temporary Total Disability - These covers employees who are completely unable to work for a temporary period due to a work-related injury or illness. The policy compensates for the loss of income until they start working.

  • Temporary Partial Disability - These covers employees who have returned to work but with reduced ability and wages. It helps bridge the gap in income until they fully recover.

  • Permanent Total Disability - These covers employees who can never return to work in any capacity after an accident or illness. These benefits are designed to provide long-term financial support.

  • Permanent Partial Disability - This applies to employees who experience a permanent injury that partially affects their ability to work. The compensation is based on the severity of the disability.

For Medical Treatment

Under this coverage, medical expenses are reimbursed as per policy conditions. It also covers health issues that arise later after the initial injury. However, it may not cover alternative treatments, such as homoeopathy or naturopathy.

For Death and Funeral Costs

In the event of an employee’s death at work, financial compensation is provided to their beneficiaries. This can help them manage the funeral costs or the loss of income.

For more detailed information, you can refer to Types of Workers’ Compensation Insurance.

How to Buy Employee’s Compensation Insurance Policy from TATA AIG?

Buying the TATA AIG employee’s compensation policy is an easy, 3-step process online. Alternatively, you can also visit one of our branches, and one of your customer support experts will guide you through the process.

Here are the quick steps to buy the plan online:

1

Select trade category

At the beginning of this page, choose your trade category (business category) for the WC policy and click on “Get Plan.” Then, enter your mobile number and proceed.

2

Provide essential information

Enter the required details, such as risk location pincode, policy tenure, worker categories, number of workers in the specific categories and average monthly wage.

3

Check quote and proceed to buy

Check the applicable premium and review the workers’ compensation policy terms and conditions. Pay the premium online to complete your purchase.

Workmen’s Compensation Policy Claim Process

1

Claim intimation

Give a written notice to TATA AIG about the incident within 7 days of the occurrence and no later than 30 days of the actual loss.

2

Submission of claim form and evidences

Fill out the workers’ compensation insurance claim form and gather evidence related to the incident. Submit them within 30 days from the date of actual loss.

3

Submission of supporting documents

Collect all the necessary supporting documents, including the doctor’s prescriptions and medical records, for the employee’s compensation.

4

Claim settlement

TATA AIG will review your documents and proceed to settle the claim within 30 days of submission of all the documents. The claim will be settled in a court of law.

Documents Required to Buy Employee Compensation Policy

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Completed Proposal Form

A fully filled proposal form signed by an authorised representative from the company.

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Organisation’s KYC Documents

  • Certification of incorporation

  • GST Certificate, if applicable

  • PAN (Permanent Account Number)

  • DIN (Director Identification Number)

  • Copy of business commencement certificate

  • Copy of ITR (Income Tax Returns)

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Employee Records

Detailed records of the number of workers and their job profiles.

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Salary Information

Average salaries of the workers belonging to the different job categories or specific salary information.

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Additional Documents

Any other documents as required by the insurance company.

Also Read: Workers’ Compensation Insurance Premium Estimation: How it’s done.

Workers’ Compensation Eligibility

Employer Eligibility: As per the Workmen’s Compensation Act

  • Applies to employers listed in Schedule II of the Act.
  • Covers factories, mines, construction sites, plantations, railways, shipping, loading/unloading and other manual labour-intensive industries.
  • Only covers contractors and subcontractors hiring workers for the above activities.
  • If an employer is not covered under the ESI Act, they must provide compensation under this Act.
  • No specific mention of employee count. But in practice, small businesses (generally, less than 10 employees) not registered under the Employees’ State Insurance Act often fall under this Act.
  • Employers who engage workers in listed occupations (not just risk-based but also operational/manual roles) are liable.

Employee Eligibility: As per the Workmen’s Compensation Act

  • Applies to “workmen” as defined in Schedule II of the Act.
  • Covers workers engaged in manual, skilled, semi-skilled, unskilled, technical, operational or clerical work in specified industries.
  • Individuals employed overseas by Indian employers as per Schedule II of the WC Act.
  • Excludes administrative, managerial or supervisory roles.
  • Coverage is for injuries, occupational diseases or death arising out of and in the course of employment.
  • Employees covered under the Employees’ State Insurance Act are excluded from this Act (Section 53 of the ESI Act).
  • For some organisations, some clerical staff may be covered if their job role is listed in Schedule II, but purely administrative/managerial roles are typically not.

Amount Payable Under Workmen’s Compensation Policy

The amount of compensation varies based on the type of injury, monthly wages and the employee’s age (to determine the relevant factor). It also depends on whether the injury occurred in India or abroad.

However, the compensation available for death and disability is fixed and may be revised by the government under the Workmen’s Compensation Act of 1923. The Social Security Division under the Ministry of Labour and Employment in India is responsible for enforcing the provisions of the WC Act.
On 3rd January 2020, the amount on which the compensation was calculated was increased from ₹8000 to ₹15,000.

Please Note: This is the basis for calculating the amount of compensation. The actual benefit can differ for individual cases based on the conditions specified under the Workmen’s Compensation Act of 1923 and the WC Policy.

Also Read: Workers’ Compensation Insurance Premium Estimation: How it’s done.

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Accidental Death

50% of the deceased employee's monthly wages multiplied by a relevant factor or an amount of ₹1.2 lakhs, whichever is higher.

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Permanent Total Disability

60% of the injured employee's monthly wages multiplied by a relevant factor or an amount of ₹1.4 lakhs, whichever is higher.

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Permanent Partial Disability

  • If the injury is listed in Part II of Schedule I (WC Act), a percentage of what is paid for permanent total disability based on the loss of earning capacity is offered.

  • If the injury is not listed, a medical practitioner will assess the disability and loss of earning capacity to determine the applicable compensation.

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Temporary Disablement

25% of their monthly wages every half month, subject to certain conditions.

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Workmen’s Compensation Policy Coverage: Add-Ons

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Medical Extension Cover

The medical extension cover offers additional workers’ compensation for medical expenses up to ₹1 lakh or more in specific scenarios. It can cover the medical expenses for the employee’s treatment based on the policy terms and conditions.

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Occupational Diseases Cover

The occupational diseases add-on under an employee’s compensation insurance covers diseases or illnesses caused by hazardous workplaces or working conditions. For example, employees working in mines or chemical industries might develop a breathing disorder.

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Terrorism Cover

This cover provides additional coverage against accidents caused by violent behaviour from employees, such as during a union meeting. This can be beneficial for industries that employ a larger workforce and have a higher chance of frequent labour issues.

Conditions Regarding Workmen Compensation

Under the law, all employees—whether working full-time, part-time, temporarily or casually—are entitled to financial protection. This protection applies in cases of injuries, incapacity, disfigurement or death while performing their duties.

Here are some of the workers compensation policy conditions that you should be aware of:

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Covered Employees

Front-line workers in the following industries are protected under this law:

  • Railway Employee: Non-permanent employees who do not fall under the sub-
    divisional, district or administrative offices.

  • Aviation Workers: Captains and crew members on an aircraft.

  • Labourers Employed Abroad: Those employed as per Schedule II of the
    Workmen Compensation Act, 1923.

  • Construction and Industrial Workers: Individuals working at construction
    sites, mines, docks, factories and specific places listed in Schedule II of the Act.

  • Automobile Workers: Drivers, mechanics, helpers and others associated with
    vehicle operations.

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Employer Requirements

According to this Act, any company or establishment operating in the sectors mentioned above and employing more than 10 employees must comply with its rules and provide the necessary protections.

How to Choose the Right Workmen’s Compensation Policy Online for Your Business?

Choosing the best workmen’s compensation policy is important to ensure your employees are protected and your business stays secure.

1

Understand Your Workforce

Look at the type of workers you employ (full-time, contract-based or seasonal) and the nature of their work. This helps you decide between named or unnamed policies and understand the kind of coverage you need.

2

Know Your Risks

Assess the possible risks in your workplace. Whether your employees are handling machinery, chemicals or working at a desk, knowing the possible injuries or illnesses will help you choose the right level of protection.

3

Explore Policy Options

TATA AIG offers a range of policies, from basic workmen’s compensation policies to ones that include extended medical coverage. Choose a policy that balances cost with the benefits your employees may need.

4

Buy with Ease

You can buy your WC policy online in just a few clicks or visit a TATA AIG branch nearby. Our customer support team is always ready to help you select and customise a policy that matches your business requirements.

Why Tata AIG General Insurance Company Limited?

Indian multinationals who have workmen's compensation needs in various countries around the world can opt for global policies from Tata AIG General Insurance Company Limited, which leverage AIG's presence in more than 130 countries. Tata AIG General Insurance Company Limited can arrange locally admitted and non-admitted policies as per the demands of the jurisdiction in which the multinational operates.

Who Should Buy a Workmen’s Compensation Policy?

As per the Workmen’s Compensation Act, 1923, the following employers are expected to provide compensation to employees for work-related injuries, illnesses or death:

Employers in sectors like construction, manufacturing, mining, transportation and plantations, where manual or high-risk work is involved.

Businesses not registered under ESI or operating in areas where ESI is not available.

Contractors or subcontractors hiring temporary, seasonal or daily-wage labour for physical tasks.

Employers of workers involved in technical, mechanical or operational roles, as listed under Schedule II of the Act.

Even if not legally mandated, buying a workmen’s compensation policy is a responsible step for any employer to protect both their workforce and business from financial risk.

Why Should You Buy a Workmen’s Compensation Insurance Policy from TATA AIG?

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Expert advice

We can help you assess your work environment and help you choose the best WC policy to cover your legal obligations.

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Instant policy purchase online

You can purchase a workers’ compensation insurance policy with us instantly in a few simple steps online.

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Wide range of business categories

We cover multiple trade categories, such as chemical workers, builders, electrical engineers, metal workers, painters and more.

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Three WC policy options

You can choose between the Basic WC Cover, WC with Medical Cover and WC with Medical Extension.

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Competitive premium rates

We offer comprehensive coverage at affordable premium rates.

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Add-ons to enhance coverage

You can customise the policy with the medical extension, occupational diseases and terrorism cover add-ons.

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Claim support through the year

We provide a dedicated customer support team to address all your specific issues related to claim settlements.

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Dedicated relationship manager

We assign a dedicated relationship manager to handle your WC policy to ensure timely assistance.

Workmen's Compensation Exclusions

  • Injuries caused by events such as war, invasion, acts of foreign enemies, hostilities (whether war is declared or not), civil war, mutiny, insurrection, rebellion, revolution, military or usurped power, nuclear weapons, ionising radiation, or contamination from nuclear fuel or waste.
  • Accidents that occur outside the specified place(s) of employment unless the employee was there on duty for the business and under the direction of the insured or an authorised official.
  • Occupational diseases contracted by an employee.
  • Medical expenses for treating any injury sustained by an employee.
  • Interest and/or penalties imposed on the insured under any law or otherwise.
  • Injuries to persons employed by a contractor or sub-contractor of the insured, unless specifically covered in the policy schedule.
  • Injuries sustained by a person who is not declared for insurance under this policy or employed outside the insured's business.
  • Any amount that the insured could have recovered from another party if not for an agreement between the insured and that party.
  • Liabilities assumed by the agreement that would not be attached in the absence of such agreement.
  • Incapacity or death resulting from the employee’s deliberate self-injury or intentional aggravation of an accidental injury.
  • Injuries or accidents resulting from the influence of drugs or alcohol.

Types of Workmen’s Compensation Insurance Policies

Employers can choose from different types of workers’ compensation policies based on how their workers are hired. These options offer flexibility in covering full-time, contract or changing staff.

Named

This policy is purchased exclusively for specific employees. The names of employees covered will be mentioned in the policy. It can be used in businesses where a few workers are involved in high-risk job profiles.

Unnamed

This policy does not explicitly mention the employees covered. It provides broader coverage and is suitable for a workforce that keeps fluctuating, such as contract-based or seasonal workers.

Workmen’s Compensation Policy: Documents Required for Claim Process

  • Workers’ Compensation Insurance: Documents Required for Death Claims

    - Claim form - Death certificate (original) - Post-mortem report (original/attested) - Medical reports if the employee was hospitalised - FIR (attested copy) - Spot Panchanama and Police Inquest report, if applicable - KYC Documents - Aadhaar Card, PAN, Passport, etc.
  • Employee Compensation: Documents Required for Disability Claims

    - Claim form - Doctor’s report - Disability Certificate provided by the doctor (original) - Medical reports, including diagnostic and investigation reports - FIR (attested copy) - Spot Panchanama and Police Inquest report, if applicable - KYC Documents - Aadhaar Card, PAN, Passport, etc.

Duration of Workers’ Compensation Insurance

The minimum policy tenure for the WC policy is 1 month and the maximum policy tenure is 12 months. It can be purchased for a minimum of one or two employees, and the maximum number depends on the specific policy conditions.

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Frequently Asked Question

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