Is it necessary to take a WC policy when you have your staff covered in Group Accident / Group Mediclaim?

We have 25 staff working in a plant/factory setup, and based on their salaries, they do not fall under ESIC. Is it necessary to take a WC policy when you have your staff covered by Group Accident, Group Mediclaim, and Group Life insurance policies?

Since they are out of the ESI coverage net, they will be automatically covered by the EC (WC is no more there) Act of 1923, subject to meeting the requirements of Schedule 1 of the Act.

Group Accident, Group Mediclaim, and Group Life insurance policies are wider in scope and coverage. They would definitely be of help in complying with the EC Act.

The coverage of employees, the nature and method of calculation, and the forum for adjudication under the EC Act, 1923 are entirely different from the insurance policies mentioned in the post. In those policies, the settlement of claims is strictly based on the value of the policy. Therefore, in my opinion, such policies cannot be substituted for an insurance policy taken to cover the liabilities of the employer in respect of employment accidents under the EC Act, 1923. It is also not mandatory under the Act to take an insurance cover. The important point is that taking an EC policy would cover the entire liability of the employer.

In addition to our learned members' reply on insurance policies, Employees' Compensation Policy is statutory in the absence of ESIC Statute. Hence, you need to take EC Policy with any private insurance companies available at your location.

The other two policies, GMC Policy and GPA Policy, are only optional. But these policies will give a name in the industry that your company has welfare aspects, which will give you an edge over other companies. Though the amount spent on these policies is small compared to other welfare expenses like canteen and transport, these policies will add value to an organization's ethics in line with multinational companies.

In some companies, they are going an extra mile with an addition of a wonderful policy called Group Term Life Insurance Policy with LIC. In the event of the unfortunate death of an employee, the nominee will be paid a hefty sum, which not only supports the family but also builds trust in the company.

I endorse the view of Shri Umakanthan.

There is no bar to having policies like group accident and Mediclaim. The objective is to indemnify and provide coverage in case of need.

EC policy is a little expensive compared to PA policy. As long as the sum covered under PA meets the quantum of EC amount based on the incident, it is okay. Under PA, weekly payments and medical treatment (subject to additional load) are available.

One has to keep in mind these factors to evaluate, see protection, and save from indemnity.

Ram K Navaratna HR Resonance