Workmen's Compensation Policy Confusion: How Many Employees Should Be Covered?

Sir,

We have 400+ employees at our site. Our client is insisting on taking a total of 400+ workmen's compensation policy. What we understand is that at any given minute within a 24-hour period, the maximum number of workmen working at the site should be covered under the WC policy because all our employees work on a 3-shift basis. Therefore, we have arranged a WC policy for the number of General Shift workmen plus first shift personnel. Kindly suggest what the actual legal requirement is.

Thank you.

The law is silent. You, as an employer, as per the Employees' Compensation Act (previously called the Workmen's Compensation Act), are bound to pay compensation for injuries caused by accidents occurring at the workplace. You cannot predict when an accident will occur. Therefore, you may discuss with the insurance company and decide on a policy where coverage is provided to protect you from the payment of compensation for all accidents that may occur.

MOHAN KUMAR
PH: 8921883907

If you take Workers' Compensation (WC) Policy, the liability for payment of compensation rests with the insurance provider. It is advisable to acquire the policy based on your client's requirements. Otherwise, you will be responsible for compensating.

Dear Major Vimal,

Your client has rightly advised you. As per the Employees Compensation Act, you need to take a policy for the maximum number of workmen deployed on any day at the site during the policy period, and not the working numbers on any particular shift. Legally, you have to consider projected overtime wages as well while taking the policy. The insurance company has the right to reject your claim if you are underinsured or have insured fewer workmen. You are required to maintain wage records for all the workmen, and when an accident occurs, you need to produce them to the insurance company along with the claim.

While obtaining the policy, you need to project category-wise wage amounts, but it should not be less than Rs. 8000 per month per workman.

Regards,
Suresh