Reasons why business require workmen compensation policy
- Author :
- TATA AIG Team
- ●
- Last Updated On :
- 04/10/2024
- ●
- 2 min read
As per the Employee Compensation Act of 1923, it is mandatory for employers to provide the benefits of workmen compensation insurance policy to their workforce. But beyond fulfilling the legal obligations, the employees compensation liability policy offers various benefits to the businesses as well.
Understanding the importance of workmen compensation policy along with the benefits and coverage it provides is essential for businesses as it aids in more informed decision-making. Moreover, comprehending the importance of work injury compensation insurance also helps ensure employee health and safety but also the long-term sustainability of the company’s operations.
What is a Workmen Compensation Insurance Policy?
A Workmen compensation insurance policy is a financial shield for employers which is designed to protect them against the financial burden of compensating employees for work-related injuries or fatalities as mandated by the Employee Compensation Act of 1923.
The workmen compensation policy provides compensation for work injury as specified by the Act while ensuring that the employers can fulfil their legal obligations without facing substantial financial strain.
Moreover, the policy extends to cover the cost of medical treatment incurred as a result of injuries, illnesses, or fatalities sustained during an employee's tenure.
Reasons Why Businesses Require Employer Liability Insurance
Legal Mandate:
As mentioned earlier, businesses are legally obligated to provide employees with compensation for work injury or disability sustained during their employment tenure. Employees compensation liability policy ensures compliance with this mandate and offers financial security to cover specified compensation amounts.
Failure to adhere to legal requirements can result in penalties and legal repercussions. This makes this policy an indispensable shield against potential legal and financial liabilities.
Comprehensive Employee Protection:
Employees compensation liability policy provides comprehensive financial protection for employees and safeguards their well-being in the face of workplace accidents or injuries.
For industries with high-risk occupations where job profiles entail higher risks of injury or illness, such as construction or manufacturing, this insurance policy acts as a vital shield for financial stability.
It covers employee injury compensation in the form of medical expenses incurred for treatment and supports the employees in meeting their daily expenses during recovery.
Coverage for Employer’s Liabilities:
In the event of work-related accidents or fatalities, employers bear the responsibility of compensating employees for their losses. The work injury compensation insurance covers these liabilities on behalf of the employer, which relieves them of the direct financial burden.
This helps mitigate the financial impact of the compensation-related expenses while also helping maintain the operational continuity of the company.
Improved Business Productivity:
Providing adequate financial protection to employees and their dependents through the workmen compensation insurance policy promotes better morale within the workforce.
Employees who feel secure in their workplace and confident in their employer’s ability to support them in times of need are likely to be more focused and motivated. This results in improved business productivity and overall efficiency of operations.
Conclusion
To conclude, the workmen compensation cover is an indispensable financial safety net that helps ensure the continued operation of the company. It helps maintain financial stability during challenging times while also ensuring compliance with legal obligations. Hence, investing in a workmen compensation insurance policy is essential for the well-being of the employees as well as the company.
When investing in SME insurance, purchasing insurance from a reliable insurance provider like Tata AIG offers the benefit of trustworthy and convenient customer service. Tata AIG’s website makes the process of buying or renewing insurance policies seamless and quick.
FAQS
Are temporary and part-time employees also covered under the Workmen Compensation Policy?
Yes, all employees, including the temporary and part-time workers are covered under this policy as directed by the law.
Under what circumstances is an employee not liable to pay compensation for work injury?
The employer is not liable to pay the compensation under the following circumstances:
If the employee sustains an injury due to their disregard of safety norms.
If the sustained injuries result in partial or total disablement that lasts less than three days.
If the accident or injury occurs due to the employee being under the influence of alcohol or drugs.
Disclaimer / TnC
Your policy is subjected to terms and conditions & inclusions and exclusions mentioned in your policy wording. Please go through the documents carefully.
- Marine Cargo Insurance
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- Institute Cargo Clauses A, B and C