Worker's comp amount under Workmen Compensation Act

Workmen's compensation policy is an insurance mandatory in India for all employers in industries such as manufacturing, technical field work, construction, mining, and factory operations.

This insurance for workmen’s compensation provides financial assistance to both employees and employers in case of unforeseen circumstances during working hours or at work locations that lead to injuries, disabilities, or death.

Certain factors are taken into consideration to determine the average workers’ compensation amount.

The factors that are taken into consideration to calculate the amount of compensation in the Workmen Compensation Act are the reason and aftermath of injury or accident, and the monthly salary package.

Let us look at them in detail below.

Impact of Injury or Illness - One of the primary factors that decide on the maximum workers’ compensation payout value is the impact of the injury or illness incurred while at work. There can be 4 different outcomes for the same under the Workmen Compensation Act 1923, and they are as follows -

• Partial permanent disability

• Total permanent disability

• Temporary disability

• Death

-Monthly Salary Payable - The other factor that determines the maximum compensation under the Workmen Compensation Act is the monthly salary of an employee. The salary percentage plays a significant role in calculating the due compensation.

The calculation of the workers’ compensation settlement amounts is possible based on the factors stated above. Let's look at each of them below.

As stated before, possession of a workmen’s insurance policy is mandatory under the Workmen Compensation Act 1923. Failure to comply will result in severe consequences for the employer, including monetary penalties and operational gaps.

To understand this better, look at the potential issues with non-payment of average workers' compensation payout below.

• If an employer is found without a workers' compensation policy, the Labour Department can impose hefty fines, which can cause financial distress.

• If an employer delays paying workers’ compensation settlement amounts, it might be liable to pay significant interest on the overall payout value, which can lead to additional financial burdens.

• Employees who do not receive the necessary compensation payout can file a case with the Labour Department, which can lead to heavy fines and legal costs for the employer.

• Repeat offenders might also have to face jail time on the pretext of negligence towards employee well-being.

Additionally, an employer might face negative company reputation, high employee turnover, and a poor working environment, which can lead to employee demotivation and a reduced scope of growth and expansion.

The workmen compensation policy is mandatory for most employers in India. However, the general eligibility for this insurance is having 20 or more employees in the organisation chart. Moreover, this insurance category is not applicable to contractors in various circumstances.

To understand how this policy works, let us look at the various inclusions and exclusions below.

Inclusions of Workmen Insurance Policy

• Injury or accident at work leading to partial disability.

• Injury or accident at work leading to temporary disability.

• Injury or accident at work leading to permanent disability.

• Injury or accident at work leading to death.

• Health concerns and diseases due to contracted sickness at work (professional diseases).

Exclusions of Workmen Insurance Policy

• Injury or accident due to employee negligence.

• Injury or accident due to non-compliance with the safety requirements while on duty.

• Injury or accident after consumption of alcohol or other illegal substances.

• Injury or accident due to unforeseen external factors like war, riots, nuclear explosions, etc.

• Self-inflicted injuries.

The workmen’s compensation policy is a significant initiative under the Workmen's Compensation Act of 1923. It ensures that all employees are treated properly and receive proper compensation for work-related injuries and accidents.

Additionally, employers also benefit from this insurance policy as they receive the required financial assistance to compensate employees and manage the legal costs of cases, if any.

Knowing how the workers' compensation settlement amounts are calculated is crucial to ensuring rightful compensation for the employees, legal obligation fulfilment for the employer, and a safe working environment for everyone.

When choosing to invest in a workmen compensation policy, you must assess and find the right insurance provider.
Tata AIG’s workmen insurance policy offers extensive coverage to employees and employers to ensure maximum financial assistance in times of unforeseen work-related accidents and other casualties.

Along with the extensive coverage, we also offer the convenience of buying and renewing insurance for workmen’s compensation online from the comfort of your home. Moreover, our customer support executives are available 24/7 to assist with any query instantly.

You can also explore our different SME insurance plans for various uncontrollable circumstances to obtain additional financial assistance and security in times of need, which can otherwise lead to significant losses.

What is the claim process for Tata AIG workmen compensation insurance policy?

The claim procedure includes the following steps -

• Notifying the claim to Tata AIG. You can do so by either calling 1800-266-7780 or by writing an email to general.claims@tataaig.com

• Collect and fill out all the necessary forms and submit the required documents to us within 15 days from the date of the accident.

• Wait for at least 30 days for the final claim settlement.

What happens if the injury incurred by an employee causing disability does not fall under the specified category in the Workmen Compensation Act?

If the specific injury is excluded from the required category under the act, the employer and employee must seek an assessment from a medical professional. The medical expert’s assessment of the injury and disability incurred will help determine the compensation amount for the employee.

What documents are required for a death claim under a workmen’s compensation policy?

The list of documents includes -

• Duly signed claim form

• Copy of FIR

• Salary documents of the employee

• Attendance records of the employee

• Proof of age via Form A, etc.