Enhancing Employee Insurance Coverage: ESIC, Workmen Compensation, and Personal Accident Policies

Dear,

We have employees under various categories, designations, and salary levels. A person whose salary is up to Rs. 7500/- is covered under ESIC. In addition to the above, what additional insurance cover should we have to cover all possible eventualities involving the staff to protect the company's interest by way of payment of compensation in case of accidents while on duty? Please advise on the need to take Workmen Compensation Cover and Personal Accident Cover for various categories of employees.

To give you a few examples:

1. A person drawing a salary of Rs. 8,000/- will not be covered under ESIC. Should we take Workmen Compensation and Personal Accident cover for this person?

2. Similarly, an Accounts Executive drawing a salary of Rs. 5,000/- who is covered under ESIC, should we take Workmen Compensation and Personal Accident cover for this person?

3. A Manager drawing a salary of Rs. 35,000/-, should we take Workmen Compensation and Personal Accident cover?

Hope the above is clear.

Awaiting your reply soon as these policies are due for renewal.

Regards,

Ujjvala Salian

Hi,

I believe that corporations are now offering various value additions to employees in order to reduce attrition rates and retain experienced personnel. In this regard, organizations are beginning to procure additional insurance policies for their employees.

You may opt for a Group Personal Accident policy or a Group Mediclaim policy, or both, for categories not covered under ESIC. The limits on these policies can be based on employee designation, salary, etc.

I hope the above information is helpful to you.

Thanks,
Vani

Hello! I would like to answer your queries as follows:

1. Since the ESI coverage is limited to Rs. 7500, you can have a personal accident policy to cover the eventualities.
2. Once a person is covered under ESI, there is no need to go for Workmen Compensation as both are exclusive (Section 61).
3. A manager, by basic concept, can't be a workman. He cannot be said to be doing work specified in the Schedule. So a personal accident policy is fine. Indeed, the WC Act doesn't call for any specific contribution or policy but only calls on an employer to meet the liability where needed. So a personal accident policy can help to meet the W.C. liability as well.

Hope this clarifies.

KK Nair

ESI COVERAGE

PLEASE NOTE: THE REVISED ESI COVERAGE WEF OCTOBER 2006 IS RS 10,000. THOSE WHO ARE DRAWING SALARY UP TO 10,000 ARE COVERED UNDER ESI ACT.

REGARDS,
MANO KAVIN