ESI or WC Which Is Applicable to My Organisation?

The government of India offers the scheme under the Employer’s State Insurance Act of 1948. Its motive is to provide financial protection to employees against the inability to work due to maternity, injury or death while performing their employment duties. It provides financial stability to the employees and their family members during hard times.

The Workmen Compensation Policy is a compensation that is mandatory for specific classes of employers to pay to their employees in case of accident or demise during their employment.

The policy aims to provide financial support to the employees who sustained injuries while performing their duties. Moreover, it provides financial support to their family while the employee is recovering from the injuries or after their demise.

Number of Employees: The ESI policy and workmen compensation insurance policy have different conditions of applicability. The very first is the number of employees in the organisation.

The ESI policy applies to organisations with 20 or more employees who earn up to ₹21,000 per month. The WC policy applicability is not defined by the number of employees or the type of organisation; it applies to all types of organisations.

Primary Objective: The primary objective of ESI policy is to provide the employees and their dependents with both financial and medical care. It is a comprehensive policy that covers the necessary aspects of cash and healthcare for the affected employee.

On the other hand, the WC policy only compensates employees for injuries or losses they sustained while performing their employment duties. It provides financial assistance to employees and their families for a course of time.

Benefits: The benefits under ESI and WC policies also differ. ESI includes medical benefits like medical consultations, hospitalisation, maternity services, and medication. Moreover, it also provides financial assistance to the employees during their temporary disability and period of illness.

The benefits of the WC policy include compensation for medical expenses, temporary or permanent disability and death benefits to the employee and their dependant for the work-related injuries or fatality.

Choosing between workmen compensation cover and Employee State Insurance is a decision that companies need to make after much consideration. They then choose the right policy for their organisation and ensure that they comply with all the necessary rules of whichever policy they decide to choose.

Like with Tata AIG workmen compensation cover, an organisation’s employees can get coverage against permanent total disablement, temporary disablement, permanent partial disablement and death.

Tata AIG offers a range of SME insurance plans that can be customised per the business’s requirements.

In which cases the ESI applicability does not exist?

Every employee who earns more than ₹21,000 per month in an organisation is exempted from the contribution towards the ESI.

Can Mediclaim replace ESIC?

No, mediclaim cannot replace ESIC, as ESIC is a mandatory policy for providing coverage to low-wage employees in the organised sector against health-related problems. At the same time, mediclaim provides much broader coverage to employees who are not covered under the ESI policy.