Insurance in a Time of Conflict: The Truth About War Risk Coverage

Provisions of workmen’s compensation policy

 

The tunnel collapse at Uttarakhand has brought many issues to the fore. Workers in the tunnel are trapped for more than a week and rescue efforts are on. Workers were into ‘excavation & tunnelling connected with mining, quarrying and tunnelling work’. Such risks are classified as high risks though unforeseen, and insurance policies exclude such risks from the scope of the policy .

Policy wording of workmen’s compensation policy states that “ if at any time during the period of insurance any employee or employees of the insured shall sustain injury by accident arising out of and in the course of his employment in the business, for which the insured is liable to pay compensation under any law(s) specified in the schedule, then the company shall indemnify the insured up to the limit of indemnity against all sums for which the insured shall be so liable, including costs and expenses for defending any such claim incurred with the company's consent’’.

What is an injury as per the policy?

Injury means physical bodily Injury including death resulting from such Injury arising out of an accident but does not include any mental sickness, disease, occupational disease, unless caused by such physical bodily Injury.

Occupational disease is excluded from the scope of cover unless caused by physical bodily injury.

               What is occupational disease?

                Employer is bound to maintain safety standards as laid out by labor laws and safety manuals and is also liable                      to pay compensation where injury results while in course of employment. 

               Occupational disease is contracted as a result of an exposure to risk factors arising from work activity

               They are caused due to the biological, chemical, physical, and psychological factors of the given work

               environment like respiratory and musculoskeletal disorders, loss of hearing, etc. 

                Although the employer is liable to pay for such ailments the insurance policy excludes the risk of

               occupational diseases unless caused by a physical injury. To illustrate the point: 

               A was working in a cement factory and suffered a leg injury while loading the bags into the conveyor.

               A was hospitalized and treated at the local hospital and the medical expenses for treatment was paid

               by the insurance company as the injury happened in course of employment. A rejoined duty after

               rest and fitness. 

              After a week A felt restless while he was attending to his work and was again admitted to the hospital

              due to breathlessness and was diagnosed with acute upper respiratory tract (URT) illness. It was found

              that the employee has been suffering with this ailment for a long time and it was chronic.

Employer again submitted a claim for   treatment of URT as claimed from him by the employee, citing it as a              consequence/continuation of the previous injury. Employer contented that the workmen’s compensation policy covered all the ailments of workers, while in course of employment.            

             Insurance company rejected the claim citing occupational disease due to the worker’s regular work with

             cement bags and material and not as a result of the physical injury sustained as above.

 

              Prolonged illness due to occupational hazards are not covered by the workmen compensation policies.

              Employers are encouraged to buy group health covers for their employees to meet such situations.

             

               A quick recap of the important E C  Act (amended WC 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

§  Death of employee

§  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

         

         A comprehensive understanding of the policy wordings helps in planning the insurance program according

         to the employer’s requirement and to comply with statutory provisions. 

       We at Zen Insurance assist in choosing the right Insurance cover to suit your needs. Please contact us for

         assistance.

       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.