Skip to main content

EMPLOYEES COMPENSATION POLICY

 

EMPLOYEES COMPENSATION POLICY

      Compensation is a tricky term, questions as to what is the exact sum, how much is too much, is it adequate for the loss and trauma suffered remain unanswered. Employers are bound to compensate the employee if   he/she suffers death or injury while on duty. It is a statutory obligation. The amount of compensation is decided based on the court’s award which takes into cognizance the age of the deceased/injured employee, dependency and gravity in case of injury.

Workmen’s Compensation insurance is a method to satisfy the obligations imposed by the worker’s compensation Statutes. Earlier known as the Workmen Compensation Act 1923 is now amended and renamed as Employees Compensation Act (E C Act ) 1923

Important E C Act Provisions:

E C Act now covers all Employees (earlier name Workmen) including Clerical and Casual Employees who are not covered by ESI Act.

Employment injury means personal Injury caused to an employee by accident arising out of and in the course of his employment.

Structured Compensation payable by employer for

Ø  Death of Employee

Ø  Permanent Total Disability 

Employer shall also reimburse the employee for:

·         Actual medical expenses incurred by him for treatment of injuries caused during the course of employment.

·         Funeral expenses are also payable

How is the sum insured calculated?

The policy does not have any SI but covers as per EC Act, 1923 limits. Sum Insured for premium calculative purpose will be the gross wages paid for the insured employees. Premium is charged on the gross wages.

For calculation of compensation, wages shall be standard wages as laid out in the Act as amended from time to time

E C Commissioner shall dispose of cases within 3 months of receipt of reference.

Employees Compensation Policy has following features.

EC policy is issued on unnamed basis and premium is adjustable on expiry with actual wages paid.

What is the cover?

The liabilities covered are as per EC Act, 1923 and Common Law.

             E C Act provides for employer to pay compensation for employment injuries on No-fault Basis.

Additional covers are available for

   Occupational Diseases -  Occupational Diseases are defined in the Act.

               Medical Expenses.

               Employees of Contractors.

   Employees of Sub-Contractors.

WC policy can be issued normally for one year but can be issued for project periods that is more than 12 months. Employees Compensation policy is mandatory for an employer and for regulatory compliance.

 

 

 

Disclaimer:   

Zen Insurance is an IRDAI registered broker which facilitates quick & accurate insurance broking services. We deal with only regulator approved products of insurers. We do not underwrite the products

Comments

Post a Comment

Popular posts from this blog

Prior and Pending Litigation in Professional Indemnity Policy

  The prior and pending litigation exclusion in liability policies is a clause designed to exclude coverage for claims related to legal disputes or circumstances already known, pending, or in progress before the policy's effective date. It’s an important exclusion because it limits the insurer’s liability for events that occurred before the policy began. Here are more details about this exclusion. Purpose of the Prior and Pending Litigation Exclusion Insurers include this exclusion to avoid covering claims or disputes that were known or existed before the policy started. It ensures that the underlying policy , Directors & Officers (DnO), Professional Indemnity (PI) policy, etc., only covers new claims that arise from professional errors, omissions, or negligence occurring during the policy period and not pre-existing or ongoing legal matters. What the Exclusion Covers Prior Litigation : Any lawsuit, claim, investigation, or l...
Post a Comment
Read more

Mitigation Costs in Professional Liability Policies

  Professional Liability Insurance in India, more commonly referred to as Errors & Omissions (E&O) insurance in the case of businesses, provides the business with insurance coverage against claims of negligence, error, or omission in the services rendered by the business under insurance. In this policy, one of the features includes mitigation cost coverage. Mitigation costs are sums of money that an Insured pays to avoid or lessen the possibility of a claim arising. For example, if a business finds an error in its work that may give rise to a potential liability claim, it may incur expenses to correct such error before it generates a claim. These costs will be incurred in trying to reduce the potential damage or liability and, therefore, may be covered under a professional liability insurance policy. However for mitigation cost section claim to trigger there needs to be a claim payable under the policy. Once the claim is determined to be payable under the policy, the miti...
Post a Comment
Read more

Exclusion of insolvency and bankruptcy in D&O policies

Broadly speaking, a D&O insurance policy offers liability cover to companies' directors and officers for claims made by others resulting from decisions and actions made while undertaking their normal duties under the employment contract. The policy includes different types of exclusions; one of them is insolvency and bankruptcy exclusion. The insolvency and bankruptcy exclusion is a provision under a D&O policy that excludes coverage directly or indirectly from the insolvency or bankruptcy of the company. Purpose of the Insolvency and Bankruptcy Exclusion 1. Risk Management: The increased risk associated with a situation involving insolvency or bankruptcy is a consideration noticed by insurers while bringing forth this exclusion. In particular, claims tend to increase at times when a company is undergoing financial trouble and stakeholders are trying to recover their losses. 2. Moral Hazard: The exclusion helps cap moral hazard, whereby directors and officers may take more ...
Post a Comment
Read more