In an establishment covered by ESI, there should be Workmen Compensation Insurance taken for those employees who are out of the coverage of ESI. There is nothing wrong in having both ESI and WC Policy. In fact, ESI is also an insurance scheme for those who are covered by ESI. In an establishment in an area not notified by ESI, naturally the entire employees come under the Employees Compensation Act and as such they should be insured by the employer against risks of death and disabilities arising out accidents. Subsequently if that area is notified as covered by ESI, the WC cover taken for those employees who come under ESI can be discontinued and the cover in respect of others can be continued.
One thing should be remembered. Under the Workmen's (Employees) Compensation Act, it is the obligation of the employer to pay compensation to workers who meet with accidents and subsequently become disabled or die. This liability of the employer has been taken up by the Employees State Insurance Corporation in respect of covered employees and it is for that service also that the employer is making his contributions.
Regards,
Madhu.T.K