Workers' Compensation Insurance & Injury Leave

Workmen's compensation cover or policy is a type of insurance that provides coverage for a business or organisation's legal liabilities in the event of work-related injuries or accidents. It offers financial compensation to workers as per the provisions of the Workmen's Compensation Act of 1923, ensuring a fair system for all parties involved.

This policy ensures that employees receive compensation for medical expenses, disability or death resulting from accidents or injuries that occur during the course of their employment, protecting both the workers and the employer from the financial burden of such incidents.

There are various types of compensation available based on the injuries. Some of the types of compensation are mentioned below:

-Dependent Benefits

One type of compensation covered under workers' compensation insurance is dependent benefits. If a worker dies as a result of a workplace accident or injury, their dependents, such as spouses, children, parents or other legally recognised dependents, are entitled to a lump sum payment. The amount is determined based on the deceased's wages and the beneficiaries' degree of dependency.

-Disability Compensation

Disability Compensation refers to the financial benefits provided to an individual who suffers a disability due to a work-related injury or illness. Under Workers' Compensation Policy, disability compensation is offered to employees who are unable to work because of a work-related accident or occupational disease. The compensation amount and type depend on the severity of the disability, i.e., temporary or permanent, partial or total.

-Medical Expenses

Another type of workers' compensation coverage includes medical expenses. This policy covers the comprehensive medical costs for injured workers or employees, including hospitalisation, surgeries, medications and more.

In most cases, it also covers any necessary therapies, such as physical therapy, speech therapy and rehabilitation services, ensuring that the worker receives comprehensive care for their recovery.

-Funeral Expenses

In the event of an employee's death due to a workplace-related injury, workmen's compensation covers the employee's funeral expenses. This will help reduce the financial stress of the deceased family while performing the worker’s last rights.

• According to Section 1 of the Workmen Compensation Act, 1923, it is applicable to the whole territory of India. However, at the time of making a claim, several aspects are reviewed as per the act, such as:

• Employees or workers employed in factories, docks, mines, etc., fall under Schedule II of the Act.

• Under Schedule II of the Act, it is also applicable to employees who work overseas.

• The policy is not applicable to Workmen Armed Forces personnel or the Union, which falls under the Employee State Insurance Act.

It is also applicable to people who work as pilots, flight crew, helpers, mechanics and others associated with motor vehicles.

According to Section 4 of the Workmen's Compensation Act, employers are liable to pay compensation to employees who suffer injuries during accidents. This section discusses the compensation paid by employers. Depending on the injury, the employer's liability for compensation may vary.

-In the Event of Death of Worker

If the worker dies while doing his job or suffers an injury that leads to his death, the family of workers or beneficiaries is entitled to receive the compensation amount. The employer's liability for compensation in the event of death is calculated using the formula below.

Claim amount = Amount equal to 50% of the monthly wages of the deceased worker (×) Relevant factor, a multiplier that takes into account various factors such as the worker's age, the nature of the job and the severity of the injury.

Also, the employer can offer the deceased family ₹1,20,000, whichever is more.

-In the Event of Permanent Total Disability

If a worker suffers a permanent total disability due to work-related accidents or injury, the employer is obligated to pay compensation. The compensation amount will be calculated based on the injury and the employee's capacity to perform the task.

Employers also offer workers comp and paid time off to injured employees. The amount is calculated using the formula mentioned below.

Claim amount = Amount equal to the 60% of wages of monthly wages of the employee (×) Relevant factor, which includes various aspects such as employee’s age, severity of injury and more.

Besides this, the employer can also offer compensation of ₹1,20,000, whichever is more.

-In the Event of Permanent Partial Disability

Suppose a worker has suffered a permanent partial disability due to work-related injury or accident, which has affected their capacity to execute tasks. Under such a scenario, the employer is obligated to pay the compensation amount. The employer's liability for compensation amount is calculated by assessing the worker’s ability to perform tasks.

Claim amount = Employee's possible future earnings determined by the medical practitioner/ Based on % disability (×) wages (×) age factor.

-In the Event of Temporary Disability

If a worker has suffered temporary disability due to work-related accidents or injury. Then, the employer is obligated to pay the compensation amount based on the type of injury and its impact. Below are some conditions for temporary disability:

• In case of temporary disability, an employee is obligated to receive 25% of the worker's monthly wage every 15 days.

• A compensation amount will only be granted if the worker is disabled for a continuous period of more than 3 days.

• The maximum duration for compensation is restricted to 5 years.

There are some scenarios where an employer is not liable for workmen's compensation cover, such as:

• Any work-related injuries that are not fatal.

• Employers are not liable to pay compensation for the initial 3 days of disability where the disability is less than 28 days.

• All the injuries that do not cause partial disability for more than 3 days.

• Any injury or accident caused in the workplace under the influence of drugs or alcohol.

• Employees who are not considered workers under the Workmen Compensation Act, 1923.

• Work-related accidents or injuries that are specified in Part C of the Workmen Compensation Act, 1923.

• The workmen's compensation policy will not cover any changes or modifications made in the policy once it is active.

Businesses in India need to be careful of the risks and challenges that come their way. It is employers' or business owners' duty to offer a safe environment to their employees. However, even after being careful, unfortunate incidents can occur at the worksite.

These accidents can cause substantial financial loss to business owners. Due to this reason, business owners prefer to invest in various SME insurance plans like workers' compensation to safeguard their financial assets.

TATA AIG offers workmen compensation policies that are tailored to meet unique business needs, offering adequate protection to all workplace environments. Our workmen's compensation policy online offers financial assistance to workers who suffer work-related injuries, and it also saves employers legal liabilities.

Furthermore, we also offer various add-ons like medical extensions, sub-contractor cover and more to enhance the coverage. Secure your workers now with our affordable workmen's compensation policy.

-Can I take both workers' comp and paid time off in India?

In India, it is possible to take both workers' compensation and paid time off, but it depends on company policies and the specific circumstances.

-Is it possible to get workers' compensation coverage for mental illness?

In India, workers' compensation for mental illness is generally more limited compared to physical injuries, but it is possible in certain circumstances.

Under the Employees' Compensation Act of 1923, workers can claim compensation for injuries or diseases arising out of their work.

However, for mental illness to be covered, it must typically be linked to work-related factors, such as trauma, harassment or extreme stress.

-Can corporate employees receive workers' comp compensation?

Yes, corporate employees can get workers' compensation in India if they suffer a work-related illness, as per the Employees' Compensation Act of 1923.

This covers medical expenses, disability and other benefits related to work-related incidents. However, the coverage is based on the specific circumstances and the employer's policy.