Labour Insurance Policy: Check Plans & Save up to 85%
Labour Insurance: Securing Work, Protecting Workforce
In labour-intensive industries like manufacturing, construction and energy, the risk of work-related accidents that result in death or disabilities is always high. As an employer, you are responsible for providing financial compensation to workers in case of such serious accidents. It’s also a legal requirement under Indian law.
According to the Workmen’s Compensation Act of 1923, employers hiring workers must provide financial compensation for any work-related injuries. This applies especially to labourers involved in heavy manual tasks who are not covered under the Employee State Insurance (ESI).
This is where TATA AIG’s Labour Insurance for workmen’s compensation becomes essential. We offer extensive coverage for a wide range of business categories, ensuring both worker protection and legal compliance for your business.
What is Labour Insurance Policy?
Work-related accidents can result in serious injuries for your labourers. This can affect their ability to work temporarily or permanently and lead to a loss of income.
With a labour insurance policy, you can protect your workers by covering their medical expenses and compensating them for lost wages during recovery. It also helps you meet legal requirements and enhances your reputation as a responsible employer.
How Does Labour Insurance Work?

Labour insurance provides financial compensation to your workers if they get injured due to a work-related accident. It covers death, temporary disability, permanent partial disability and permanent total disability. Additionally, it helps pay for medical expenses for work-related injuries.
For instance, if a worker gets severely injured while on the job, this can affect their ability to work until they recover. In this case, you are legally responsible for compensating them for the loss of income. With a labour insurance policy, you can support your workers by offering compensation on time when these incidents happen.
To do this, you simply need to file a claim under your labour insurance policy, and the insurance company offers compensation for workplace injuries or incidents.
Also Read: Types of Workers’ Compensation Insurance
Why Do You Need a Labour Insurance Policy in India?
Be Legally Compliant

If your business must compensate workers for work-related injuries under the Workmen’s Compensation Act of 1923, buying an insurance policy for labour helps you meet this legal requirement.
Protect Your Business Against Labour Disputes

Labour insurance safeguards your business from court trials raised by injured workers and avoids conflicts with labour unions. This helps in maintaining your company’s reputation and ensures smooth business operations.
Save Your Company From Major Financial Loss

In large-scale operations, even a single accident can affect many workers, and the cost of compensation can also be high. Labour insurance covers these expenses and ensures your business runs smoothly without disruption.
Improve Your Brand Image

Public opinion plays a crucial role in success. By providing labour insurance coverage, you can ensure a positive brand image. It helps attract positive public opinion, investors, and talented professionals to your organisation.
Benefit From Flexible Options

Customise your labour insurance policy to cover a small team or a large number of workers based on your specific business requirements. This helps ensure you have sufficient coverage without paying additional costs.
Worker Protection

Jobs that require physical work, such as in construction and manufacturing, have a higher risk of accidents. With labour insurance, you can ensure your workers and their families receive timely medical care and salary compensation in case of injury.
Broad Coverage

With labour insurance, you can protect your workers against death, different types of disabilities and medical expenses from work-related accidents. Simply put, you have one policy that covers all aspects of employee protection.
Also read: Benefits of Workmen’s Compensation Policy
Labour Insurance Case Studies
Case Study 1:

An employee of N.E. Railway, Samastipur (Bihar), died due to an accident at work on 28th August 2000. His family filed a claim for the loss in 2021 but received the compensation of ₹1,42,680 only in 2002.
The Workmen’s Compensation Commissioner imposed a penalty of ₹71,340 on N.E. Railways for the delayed compensation.
The Railways challenged this decision in Court. However, the Patna High Court supported the penalty. The Court stated that compensation should have been paid on time, as there was no reason for the delay in payment.
Key Insights: Delays in providing workmen’s compensation can lead to heavy penalties for employers. A labour insurance policy helps ensure timely compensation and protects employers from such legal issues.
Case Study 2:

An employee of Mettur Thermal Power Station, a unit of Tamil Nadu Electricity Board, died due to an accident while travelling to his workplace.
The Workmen’s Compensation Commissioner said that the accident occurred “in the course of employment”, although it happened outside the actual workplace.
The employer challenged this decision at the Madras High Court. However, the Court ruled in favour of the employee and stated that modern work practices need to have a broader view and that accidents while travelling to the workplace can still be linked to employment. This made the employer liable to pay the compensation.
Key Insights: Employers can also be held liable for accidents that occur outside the actual workplace. Therefore, it is important to be aware of your legal requirements to keep your business protected.
(Source - Workers Compensation Case Studies)
Who Should Buy Labour Insurance?
Under the Workmen’s Compensation Act of 1923, employers in labour-intensive industries and others engaging workers in technical or mechanical job roles, as listed under Schedule II, must provide financial compensation to their workers for work-related accidents.
Purchasing a labour insurance policy can be highly relevant in the following scenarios:
- Businesses that involve labour-intensive tasks like manufacturing units, factories and shipping companies.
- Businesses that involve high-risk operations such as electricity generation, chemical manufacturing, or mining.
- Businesses that employ a large workforce, such as large retailers, logistics companies and automotive repair.
- Businesses that hire contractual workers for building construction, road maintenance or infrastructure development.
Please Note: Employers can cover their workers under either labour insurance or Employee State Insurance (ESI), but the same claim cannot be filed under both policies.
Also Read: ESI or WC, Which Is Applicable to My Organisation?
How to Buy Labour Insurance Online?
Go to the Buy Option: At the top of this page, find the option to select the trade category and proceed to purchase labour insurance.
Choose Trade Category: Choose a suitable option under “Select Trade Category” and click on “Get Plan”.
Enter the Required Details: Please provide your PIN code, worker categories, the number of workers in each category, and their average monthly wages.
Check Premium Quote: Check your labour insurance premium based on the selected coverage. Adjust your coverage to view updated quotes instantly.
Pay the Premium: Proceed to pay the premium using a suitable payment method and complete your labour insurance application.
Also Read: Key Factors for Choosing Workmen’s Compensation Policy
Why Should You Purchase Labour Insurance from TATA AIG?
- Expert guidance - We help you understand your workplace risks and help you choose the right labour insurance policy.
- Easy online purchase - Buy labour insurance online quickly and easily in just a few simple steps.
- Coverage for various sectors - Protection for high-risk business sectors like builders, chemical workers, metal workers, electrical engineers and more.
- Customised policy options - Choose a policy that fits your unique needs and enhance your protection with add-ons.
- Prompt claim settlement - Our dedicated support team ensures fast claim processing and worker compensation.
Key Features of TATA AIG Labour Insurance Policy
Key Features | Labour Insurance Policy Details |
---|---|
Businesses Covered | Coverage for over 100 trade (business) categories |
Discounts | Save Up to 85% |
Policy Tenure | 1 - 12 months |
Policy Tenure | |
Amount of Compensation | Standard coverage as per the Workmen's Compensation Act of 1923. |
Salary Requirements or Restrictions for Workers | No salary limitations |
Policy Options | |
Add-Ons | |
Number of Workers Required to Purchase the Labour Policy |
What are the Exclusions Under Labour Insurance Policy?
Exclusions | Details |
---|---|
Injuries Due to War | Injuries caused by war, public protests, nuclear incidents, or attacks by foreign forces are not covered. |
Occupational Diseases | Occupational diseases, such as breathing disorders and skin issues, contracted by an employee are not covered unless specifically mentioned in the policy. |
Minor Injuries | Injuries that do not result in partial disablement lasting more than three days. |
Injuries Due to Misconduct Or Self-Intentional Harm | Injuries caused under the influence of drugs, alcohol, self-injury, or purposefully worsening an accidental injury. |
Compensation Based on Agreements | Compensation that needs to be paid based on agreements that are not required by the law. |
Unspecified Workers | Employees not classified under the Workmen's Compensation Act 1923 are not covered. |
Unspecified Diseases | Diseases that are mentioned in Part C of the Workmen's Compensation Act 1923 are not covered. |
Operational Or Environmental Changes | Injuries resulting from changes in the workplace or operations after the policy has been activated. |
Please Note: This is a general list of exclusions. Please review the policy document carefully for complete details before purchasing the policy.
Labour Insurance Policy Add-Ons Cover
A standard labour insurance policy typically covers death and disability resulting from work-related accidents. However, if your business has specific needs, you can also choose to add optional add-on covers.
- Medical Extension Cover - This provides up to ₹1 lakh for medical expenses. It can provide additional financial support to the workers, especially when an employee is hospitalised for more than one day.
- Occupational Diseases Cover - It covers diseases or illnesses that develop from working in harmful work conditions for a long time. This can include respiratory issues in factories, skin problems from working with chemicals, etc.
- Terrorism Cover - This offers protection against violent incidents triggered by workers, like during union protests. It is suitable for businesses with a large workforce where labour-related issues may arise more frequently.
Role of Labour Insurance in Strengthening Employer-Worker Relationships
Helps In Creating A Safer Work Culture:
Labour insurance encourages employers to improve workplace safety by implementing better training practices and preventive measures to prevent accidents.
This is especially important in industries such as chemical manufacturing and automotive repair, where even the smallest safety concerns can lead to serious accidents. Proper training and safety measures minimise these risks.Building Trust and Retention:
Labour insurance makes workers feel more valued at their workplace. It builds trust, encourages responsible behaviour, and promotes long-term relationships.
In industries like warehousing and logistics, where workers handle heavy loads, the risk of accidents is higher. Labour insurance coverage for your workers enhances job satisfaction and strengthens their commitment to your organisation.
How to File a Labour Insurance Claim with TATA AIG?
1.Inform Us About the Incident: Submit a written notification letter to TATA AIG within 2 days from the date of the incident.
2.Cooperate with the Investigation: An investigating officer will be sent to your workplace to verify the claim. Cooperate with the official by providing the necessary information.
3.Collect Evidence and Documents: Collect all the necessary documents, such as medical reports, disability reports or the worker’s death certificate, along with any evidence related to the incident.
4.Submit the Claim Form and Documents: Submit the completed claim form with the policy number, name of the insured, the injured worker’s name, accident details and required documents. This should be done within 15 days of the worker’s discharge from the hospital and 30 days in case of accidental death.
5.Claim Approval and Settlement: We will review your claim form and supporting documents for processing. Once your claim is approved, we will release the payout. Claims approvals can take up to 30 days.
Also Read: The Most Common Workers' Compensation Claims
Documents Required to File a Labour Insurance Claim
For All Types of Claims

- Labour policy claim form, duly filled and signed.
- Medical reports
- Hospital bills
- Previous compensation records, if applicable
- Statements from witnesses, if available
- FIR, if applicable
For Disability Claims

- Disability Certificate
- KYC documents for proof of identity/address
For Death Claims

- Death certificate
- Postmortem report
- Completed Form A as per the Employee’s Compensation Act 1923
Please Note: The documents required can vary for individual cases. Kindly check with our customer support team for detailed requirements.
How Does Labour Insurance Protect Workers? (Inclusions)
Please Note: This is a general list of possible inclusions. The actual coverage will depend on the specific terms and conditions of the policy you choose.
Further Reading: [Workmen’s Compensation Insurance]https://www.tataaig.com/sme-insurance/workmen-compensation-insurance)
Death
Compensation for the worker’s family in case of accidental death
Temporary Disability
Covers medical expenses and lost wages for workers who cannot work temporarily
Permanent Partial And Permanent Total Disability
Compensation for workers whose ability to work is affected permanently
Occupational Diseases
Cover illnesses or diseases due to harmful work conditions, such as respiratory illnesses
Medical Expenses
Reimbursement for medical expenses related to work-related bodily injuries.
Legal Expenses
Legal and approved expenses involved in claim settlements
Disclaimer / TnC
Your policy is subjected to terms and conditions & inclusions and exclusions mentioned in your policy wording. Please go through the documents carefully.
Frequently Asked Questions on Labour Insurance Policy
