Employees compensation insurance ( WC insurance)
Accidents can occur in any workplace. The Employee Compensation Act, of 1923 and its amendments thereafter ( earlier known as the workmen compensation (WC) Act) provide for the payment of compensation by the employer to its employees/their family if personal injury is caused to them by accidents arising out of and in the course of their employment.
Any employer, as a principal or contractor, can take this policy to cover the liability towards employees/dependents under the Employees compensation act, common law, and fatal accident act.
It is an unnamed policy, taken for the estimated number of workers/ employees for a particular period and on estimated annual wages. The policy can be taken for the contract period which may be less than a year or an annual policy. One should ensure no understatement of wages or the number of workers made in the policy to avoid any proportionate deduction in the event of a claim.
Coverage
Major Exclusions.
Employee’s liability policy vs ESICS.
The ESI scheme is applicable to all factories and other establishments as defined in the Act with 10 or more persons employed in such establishments and the beneficiaries’ monthly wage does not exceed Rs 21,000. The locations where the ESIC scheme is applicable are already notified by the government. Wherever the ESIC scheme is not applicable including employees drawing a salary of more than 21000 p.m. and not covered under ESIC, it is mandatory for them to have an employee’s liability policy (WC Policy)
Types of claims and procedures.
Once an incident is reported, immediate intimation should be given to the insurance company followed by the timely submission of necessary documents. The following are the type of WC claims reported under employee liability insurance.
- Death claims. The claim should be lodged with all supporting documents like attendance and wage register, post-mortem report, panchnama and inquest panchnama, death certificate, identify proof showing age, etc. As per the prevailing Act, the compensation will be worked out at 50% of monthly wages (subject to a maximum of 50% of 15000) multiplied by the relevant factor of the age of the deceased as defined in the Act.
- Permanent total / partial disability. The permanent disability has to be certified by the treating Dr or the civil surgeon. Claim for permanent total disability will be worked out at 60% of the monthly wages (subject to a maximum of 60% of 15000). The amount so arrived will be multiplied by the relevant factor of the age of the injured as defined in the Act to arrive the compensation under 100% permanent disability. In the case of partial total disability, the amount worked out for 100% disability will be multiplied by the % of disability as certified by the Dr to arrive at the compensation amount.
- Temporary total or partial disability. The amount of compensation payable will be 25% of the monthly wages for each fortnight if the disablement is for more than 28 days. If the disability period is less than 28 days, the compensation will be payable after the expiry of a waiting period of 3 days from the date of disablement. In case the disability period is less than 3 days, no compensation will be payable. The maximum tenure for Temporary Disability under the WC policy is 5 years
- Medical expenses will be paid as per the coverage in the policy opted.
- Method of settlement. In case of death and permanent disability, the insured should deposit the compensation amount with the WC court/labor commissioner within 30 days from the date it fell due. If the insured provides proof of deposit, the insurance company will reimburse the amount. Otherwise, the amount will be directly deposited with the court by the insurance company. Claim for temporary disability and medical expenses shall be directly paid to the insured.