Employers in India are mandated under the Fatal Accident Act 1855, and Workmen’s Compensation Act 1923 to provide financial coverage to their employees in the event that their workers get maimed or killed during working on site.
Such a policy generally covers workmen in industries like mining, construction, ship building, plantations, sewage disposal, radioactive jobs, etc. The compensation provided under this scheme covers the cost of hospitalization, rehabilitation, diagnosis, etc. Further, if the worker dies, the family is compensated for their loss.
Let us elucidate some of the most important benefits of Workmen Compensation Insurance:
Let us now understand the extent of coverage and protection provided to the employees in different scenarios.
Type of claim
Death due to accident
Rs.1,20,000 or 50% * age * wages (Whichever is higher)
25%* number of days of absenteeism/disability * wages / 15
Permanent disability (Total)
Rs.1,20,000 or 60% * age * wages (whichever is the higher amount)
Permanent disability (Partial)
Loss of the workers earning capacity ascertained by a registered doctor / % extent of disability * wage / 15
Let us understand how Workmen Compensation Insurance works with the help of a real world example.
Let us assume that Mr. Sashikant, a workman, working in a car factory met with an unfortunate accident while assembling a car and died.
As he was covered under Workmen Compensation Insurance, Mr. Sashikant’s family was compensated to the tune of Rs.40 Lakhs. His family used this money to fund the education of Mr. Sashikant’s daughter, and the rest of the funds were utilized for running the daily chores of the house.
Injuries caused while working
Employees not considered workmen
Diseases caused while working
Death caused due to being under the influence of alcohol
Disability caused due to being under the influence of alcohol
Partial and total disability
Intentionally flouting the safety norms laid down by the employer
Death or disability caused due to being under the influence of illicit drugs.
Accidents of non-workers
Diseases under Section ‘C’ of The Workmen’s Compensation Act
Health care coverage
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Frequently asked questions about Workmen Compensation Insurance
The cost of insurance is borne by the employer.
It is mandatory for employers employing more than 20 workmen in their business.