Exploring Workmen's Compensation: Can Personal Accident Policies Cover Employer Liability?

Dear All,

Our company is registered under the Shops and Establishments Act. I am seeking specific details regarding workmen's compensation in the event of an accident while an employee is on duty, whether inside or outside the company premises.

Our work conditions do not currently include provisions for occupational diseases. In light of this, I am exploring whether a personal accident policy would be sufficient to cover the company's liability in such situations.

Although I believe that legally, a personal accident policy may not fully absolve the company of its liability, it could potentially be addressed through a mutual agreement with the employee. This agreement could involve obtaining written consent from the employee stipulating that any compensation received from the insurance company in such instances would be considered valid as compensation from the employer. The agreement could also specify that the employee will not pursue further compensation from the employer through labor court proceedings.

I am curious to learn if any other companies have adopted this approach and, if so, what format such agreements typically take.

To the best of my knowledge, the maximum compensation limit under the Workmen's Compensation Act is 4 lakhs. Please correct me if my understanding of the WCA is incorrect in any way.

Thank you, and I eagerly await a valuable response at your earliest convenience.

Shradha

The Indian Workmen's Compensation Act of 1923 provides for the payment of compensation by the employer to their employees (or their dependents in the event of fatal accidents) if personal injury is caused to them by accidents arising out of and in the course of their employment.

The maximum compensation payable is as follows (as per the W.C. Amendment Act of 2000):

- Fatal Injury: Rs. 4,57,080
- Permanent Total Disablement: Rs. 5,48,496
- Permanent Partial Disablement: According to incapacity
- Temporary Disablement: Half-monthly compensation

Bajaj Allianz General Insurance Company Limited policies offer employers one of the following two forms of cover:

- Indemnity against the employer's legal liability to their employees under the Indian Workmen's Compensation Act of 1923, and subsequent Amendments of the said Act prior to the date of issue of the policy, under the Indian Fatal Accidents Act of 1855, and at common law.
- Indemnity against the employer's legal liability to their employees under the Indian Fatal Accidents Act of 1855 and at common law.

Additionally, the company bears the costs and expenses incurred with its written consent in the settlement of claims.

Other than Bajaj Allianz, some other companies such as National India Assurance Company also provide similar insurance. Check out [Bajaj Allianz's website](http://www.bajajallianz.com/BagicNxt/bajaj_home/products/businee_unit/workmen_comp.htm).

What was the monthly wage of a workman for the purpose of 4(a) and (b) as of October 5, 2009, for the computation of compensation under the Workmen's Compensation Act, 1923.