Workers' Compensation Insurance and Employee Negligence

Workmen’s compensation policy or insurance is an insurance that employers must purchase to compensate and safeguard their employees. This policy is a must to fulfil the requirements of the Workmen's Compensation Act.

The Workmen’s Compensation Act of 1923 mandates employers to financially compensate the workers if they meet with an injury or accident at the workplace. As per the policy, an employer must compensate the employee if they are injured or suffers a disability.

This insurance compensates the employees by providing for their medical expenses in case of workplace injuries, financial aid if they suffer a disability, or compensation to their dependents in case of death. In the event of the employee’s death, the dependents shall receive compensation from the employer.

Every employee is required to exercise utmost caution while carrying out his duties at the workplace. It includes following all the safety protocols and acting wisely so as to avoid any accident or harm while completing his work.

However, when an employee does not act with reasonable care at the workplace, and it leads to any unfortunate incident, accident or damage, it is termed as employee negligence. Since the workmen’s compensation insurance is based on the principle of “No-Fault,” it will only compensate when the incident takes place despite all the precautions and safety norms.

While the WC policy does not require proof of negligence in worker’s compensation, in certain cases, employee negligence can affect their eligibility for compensation.

• Here are the situations under which the employee is not eligible to receive any compensation under the Workmen Compensation Policy.

• When an employee sustains any injury due to intentional self-injury or intentional act of worsening the injury, he will not be eligible to receive any compensation under the insurance policy.

• If an accident occurs when the employee is under the influence of drugs or alcohol, which injures the employee, he will not be eligible to receive any compensation. Even if the claim is legitimate, being intoxicated goes against the employee.

• Suppose an employee gets injured at the workplace due to non-compliance with the order or rule framed for safety and raises a claim. It means that the employee has not followed the safety protocol as instructed. In that case, it will be termed as a worker’s compensation negligence claim and no compensation is payable by the employer.

• When the employee knowingly removes the safety guard or safety device which he knows is essential for his safety and suffers an injury at the workplace, it is against the provisions of the WC insurance and no compensation will be paid in such a case.

• If the employee is found engaging in any unlawful or illegitimate activity at the workplace, his compensation claim will be dismissed.

• Medical Benefits - Injured workers are eligible to receive the expenses for medical treatment and rehabilitation. The expenses include hospital bills, doctor fees, diagnostic tests, medicine costs, surgery costs and other medical requirements.

• Death Benefits - If an employee dies due to a workplace accident or injury, WC policy compensates his family members with an amount as stated in the WC Act. It inlcudes the funeral expenses of the employee and a sum for supporting the finances of the employee’s dependents.

• Wages Cover - When an employee is injured at the workplace and suffers a temporary or permanent disability, he may receive wage replacement benefits. It provides the employee with financial compensation to replace his lost wages.

• Vocational Rehabilitation - If an employee is unable to return to his workplace due to his injury or disability, WC insurance provides them with vocational rehabilitation services. It allows the employee to learn a new skill or find alternative employment as per his capabilities.

• Safeguards the Employees - Workmen Compensation Insurance safeguards the employees working in risky industries. It provides them with compensation to support them during their recovery phase and after their death, it supports the dependents.

• Aids Employer to Fulfil his Obligation - Worker's Compensation Insurance aids employers in meeting regulatory compliance as required by the Employee Compensation Act. Thus saving them from any legal consequences.

• Saves From Financial Losses - Workmen’s compensation saves employers from incurring financial losses as they would have to bear the huge cost of compensating the employees in the event of a workplace accident or death.

• Enhances Credibility - Employers who provide workmen compensation foster a feeling of security among the employees, leading to increased credibility within the organisation and in the industry.

• Covers Legal Expenses - Employers also get coverage for legal expenses if the workers file any suit against them. Again, this saves the employer a huge amount.

All businesses must have a worker's compensation policy online to safeguard their employees and fulfil their obligations. Workers' compensation insurance saves employers from spending huge sums of their capital on compensating employees in case of workplace injury or death.

TATA AIG offers affordable and efficient SME insurance to insure employers, saving them from heavy losses and allowing them to compensate employees adequately as per the law. Thus helping businesses maintain a reputable image in the industry.

• What is employer negligence in workers' compensation?

  If an employee is injured at the workplace because the employer failed to provide a safe environment, they can demand compensation for the injury as a result of employer negligence. It is a claim against the employer for their fault, which caused injury to the employee. Under such a situation, the employee is entitled to receive additional compensation beyond the regular scope of Employee Compensation Insurance.

• How much compensation is paid to an employee if he gets injured or dies due to workplace injury?

  The Workmen’s Compensation Act of 1923 states the methods to calculate the compensation amount payable to an employee under different circumstances. The compensation for injury, temporary disability, permanent disability, death, etc., is calculated with the help of the specific formula stated in the Act.

• Who receives the worker’s compensation when the employee dies due to workplace injury?

  As per the provisions of the law, all the employee dependents are eligible to receive the workmen's compensation. It includes the employee's widow, son, daughter, mother and other family members who are dependent on his earnings.