Query On Site Specific WC Policy & All India Validity WC Policy

Dear Members,

While engaging contractors for temporary work at a manufacturing site, normally contractors have an "All India Valid" Workers' Compensation (WC) policy, which specifies the number of workers employed by the contractor at various locations. It is possible that the contractor may have more workers than the number mentioned in the WC policy. To avoid such a situation, please share your views or any legal provisions on requesting a site-specific policy from the contractor.

Further, if the contractor has a General Public Liability (GPA) policy instead of a WC policy, in the event that a payment needs to be made under the Employees' Compensation (EC) Act, will the payment made through the GPA policy be processed through the Labor Court? Will it be considered as compensation under the EC Act, or will the liability for WC payment still remain?

Thanks and Regards,

Gaurang Sheth

Dear Gaurang Sheth,

The Workers' Compensation (WC) policy of the contractor should cover the average number of workers employed by him on any given day. This is because, in the event of a claim, it will serve as proof/evidence.

The Group Personal Accident policy is similar to a WC policy but will not replace it. The advantage of a Group Personal Accident Policy is that it covers 24 hours worldwide and is not confined to the place of employment. Moreover, for accidents suffered by employees and loss of earning capacity for brief spells, the GPA offers weekly benefits subject to a maximum of 1% of the sum assured or Rs. 3000/-, whichever is lower. However, the WC policy is a widely accepted policy and can be open-ended or unnamed.

In my opinion, the Group Personal Accident policy cannot be open-ended or unnamed. Therefore, my recommendation would be to advise the contractor to take a WC policy.

M.V. KANNAN