Workmen’s Compensation Insurance

Protect your employees against workplace injuries while staying fully compliant with labor laws.

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PRODUCT OVERVIEW

What is Employee’s Compensation Policy?

An Employee’s Compensation Policy is a statutory liability insurance that protects businesses against compensation claims arising from employee injury, disability, occupational illness, or death during the course of employment. For businesses with operational, on-site, contractual, manufacturing, logistics, or labour-intensive workforces, workplace incidents can lead to significant financial liabilities. In the absence of insurance, these compensation costs, legal liabilities, and related expenses must be borne directly by the employer.

LEGISLATIVE

The Employee’s Compensation Act, 1923

The Employee’s Compensation Act, 1923, establishes the legal framework for employee compensation in India and defines an employer’s statutory liability in case of workplace-related injury, disability, occupational illness, or death. The Act defines employer liabilities, compensation eligibility, payout calculation, and the categories of employees covered under the law.

Amount Payable Under the Employees’ Compensation Act

The Employee’s Compensation Act defines the compensation amounts, based on employee wages, age factor and injury.

FORMULA

50% x Monthly Wages x Age Factor

Example Wage

₹13,500; Age = 28; Age Factor = 211.79

(₹1,20,000 is the minimum compensation)

COMPENSATION

50% × 13,500 × 211.79 = ₹14,29,583

((or ₹1,20,000 minimum, whichever is higher)

FORMULA

60% × Monthly Wages × Age Factor

EXAMPLE

Wage = ₹13,500; Age = 28;
Age Factor = 211.79

COMPENSATION

60% × 13,500 × 211.79 = ₹17,15,499

FORMULA

% Loss of Earning Capacity × Full Compensation Amount (PTD)

EXAMPLE

Loss of one eye = 40% loss of earning capacity (per Schedule I).

Full Compensation (PTD) = ₹17,15,499

COMPENSATION

40% × 17,15,499 = ₹6,86,200

FORMULA

25% × Monthly Wages (paid half-monthly)

EXAMPLE

Wage = ₹13,500

These calculations are based on Schedules I and IV of the Act. Employers are legally obligated to pay these amounts regardless of their financial capacity.

COMPENSATION

25% × 13,500 = ₹3,375 per month

Paid as ₹1,687.50 every 15 days during the disability period

Where:

Monthly Wage Cap - The maximum monthly wage for calculation is capped at ₹15,000, even if the actual wage is higher.
Age Factor - Based on the factor table provided by the Act which decreases as age increases.
Relevant Factor - Determined based on the age of the employee at the time of the incident.

Note

Monthly Wage Cap

The maximum monthly wage considered under the Act is capped at ₹15,000. Even if an employee earns more, calculation is restricted to this limit.

Loss of Earning Capacity

The percentage reduction in an employee’s ability to earn. For specific injuries, the % is defined in Schedule I of the Act. For others, it must be assessed by a qualified medical practitioner.

Age Factor

A legally defined multiplier based on the employee’s age at the time of the accident, as specified in Schedule IV of the Act.

Temporary Disability Duration & Funeral

Paid after a 3-day waiting period. If disability exceeds 28 days, payment starts from the first day. The maximum duration is 5 years.

Funeral Expenses

In the case of death, the employer must pay an additional ₹15,000 towards funeral expenses.

Statutory Compliance

Helps businesses comply with the Employee’s Compensation Act, 1923 and fulfil employer liability obligations under Indian labour laws.

Avoid High Compensation Liabilities

Workplace injury or death claims can lead to substantial compensation payouts, which may directly impact business cash flow if uninsured.

Mandatory for Contracts & Tenders

Many government projects, corporates, factories, and principal employers require WC insurance as part of vendor onboarding and contract compliance.

Coverage for High-Risk Workforce

Essential for businesses employing factory workers, contractors, technicians, drivers, warehouse staff, or field employees exposed to operational risks.

Protection Against Legal Exposure

Helps businesses manage legal liability arising from workplace accidents, occupational diseases, and employee compensation claims.

What is Covered

Legal Liability Coverage

The policy covers employer liability under:

Employee's Compensation Act, 1923 (including amendments)

Additional liability beyond Statutory law, as per agreed terms in the policy

Fatal Accident Act 1955

Core Coverage

Accidental death of an employee

Permanent total or partial disability

Temporary disability due to workplace injury

Additional Coverage (Add-ons)

Occupational Diseases (Schedule III)

Covers diseases specified under Schedule III of the Employee's Compensation Act, 1923, including illnesses caused by exposure to hazardous or toxic substances during employment.

Contractors & Subcontractors

Extends coverage to contractors, subcontractors, and their employees engaged in the insured's business operations, subject to policy terms.

Medical & Surgical Expenses

Covers expenses incurred for medical treatment or surgical procedures arising from workplace injuries, where hospitalisation exceeds 24 hours.

What is Not Covered

War & civil disturbance

Injuries arising from war, riots, civil unrest, or acts of terrorism are not covered.

Self-inflicted injuries

No coverage for injuries intentionally caused by the employee.

Intoxication-related incidents

Claims are not valid if the employee was under the influence of alcohol or drugs at the time of the incident.

Pre-existing conditions

Injuries or illnesses existing before the policy start date are excluded.

Outside work scope

Incidents occurring outside working hours or not related to job duties are not covered.

Fines & legal penalties

Any penalties, fines, or interest imposed on the employer under law are not covered.

WHY INSURANCE

Who Should Buy an Employee’s Compensation Policy?

Workmen’s Compensation Insurance is essential for any organisation that employs workers and is responsible for their safety and well-being at the workplace. It is particularly relevant for:

Business owners & employers

who want to protect their organisation from legal and financial liabilities arising from workplace incidents

Contractors & subcontractors

who engage labour for project-based or on-site work

Companies with on-roll or contractual workers

across industries such as manufacturing, construction, logistics, and services

Organisations employing manual, technical, or field staff

who are exposed to higher workplace risks

WHY INSURANCE

Documents Required to Buy an Employee’s Compensation Policy Online

To purchase an Employee’s Compensation Policy online, you need to provide basic business and employee-related information. Keep the following documents ready:

Completed proposal form

Signed by an authorized signatory, detailing the nature of the business

Employee details

Including the number of workers and their job roles

Salary or wage records

Of employees for accurate premium calculation

Additional documents

If required by the insurer based on the nature of the business

CLAIMS

What is the Claim Process for Employee’s Compensation Insurance?

Submit the Claim Request

Share incident details, employee information, and policy details with us at help@coverfox.com to initiate the claim process.

Incident Review & Assistance

The Coverfox team reviews the reported incident and guides the employer on the required claim procedures and next steps.

Submit Required Documents

Provide supporting documents such as employee records, incident details, medical reports, FIR copies (if applicable), and policy information.

Insurer Assessment & Verification

The insurer reviews the submitted documents and conducts claim verification based on policy terms and incident details.

Claim Settlement

Once verification is completed successfully, the insurer processes the compensation payout as per the approved policy coverage and terms

Dedicated Claims Assistance

Get end-to-end support from the Coverfox team during claim intimation, documentation, and insurer coordination.

Quick Policy Issuance

Buy your WC policy online with a simple documentation process and faster turnaround time.

Industry-Specific Coverage Options

Customise coverage based on workforce type, industry risk, and business requirements.

IRDAI-Registered Insurers

We partner with insurers registered with the Insurance Regulatory and Development Authority of India (IRDAI) to offer compliant Workmen Compensation Insurance solutions.

What is a Workmen Compensation Policy?

A Workmen Compensation Policy (WC policy) is insurance that covers an employer's legal liability for employee injury, disability, or death due to workplace accidents, ensuring compensation is paid as per law.

Is Workmen Compensation Insurance mandatory in India?

Yes, under the Employee's Compensation Act, 1923, employers must compensate employees for work-related incidents. A WC policy helps meet this obligation without financial strain.

Who should buy a Workmen Compensation Policy?

Any organisation employing workers—including businesses, contractors, and companies with manual or field staff—should buy this policy to manage risk and ensure compliance.

What does a WC policy typically cover?

It covers compensation for death, permanent or partial disability, and temporary disability, along with medical expenses and occupational diseases as per policy terms.

Does the policy cover contractual or temporary workers?

Yes, coverage can be extended to contractual and subcontracted workers if declared at the time of purchase, depending on the policy terms.

What factors affect the premium of WC insurance?

Premium depends on the nature of business, employee roles, risk exposure, number of workers, wages, and coverage limits selected.

Can a Workmen's Compensation Policy be purchased online?

Yes, you can buy WC insurance online by submitting basic business and employee details, with quick policy issuance.

How is compensation calculated under the policy?

It is calculated based on wages, age, and type of injury, using standard formulas defined under the Employee's Compensation Act.

What is the claim process for workers compensation insurance?

The employer must inform the insurer, submit required documents, and the claim must be verified before compensation is paid as per policy terms.

What happens if an employer does not have a WC policy?

The employer remains legally liable to pay compensation, which can lead to financial loss, penalties, and reputational risk.

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Disclaimer

The coverage, inclusions, exclusions, terms, and conditions under an Employee’s Compensation Insurance Policy may vary depending on the insurer and the plan selected. The information provided is based on standard industry practices and is intended for general informational purposes only. Final coverage applicability and claim settlement shall be subject to the respective insurer’s policy wording and underwriting guidelines.

Coverage under an Employee’s Compensation Insurance Policy applies when the employee is engaged in work related to the employer’s business, and the incident occurs during the course of employment. A valid employer–employee relationship must exist for the claim to be admissible.

Workmen’s Compensation Insurance

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What is Employee’s Compensation Policy?

The Employee’s Compensation Act, 1923

Amount Payable Under the Employees’ Compensation Act

Why Do You Need an Employee’s Compensation Insurance Policy?

Statutory Compliance

Avoid High Compensation Liabilities

Mandatory for Contracts & Tenders

Coverage for High-Risk Workforce

Protection Against Legal Exposure

What is Covered & Not Covered?

What is Covered

What is Not Covered

Who Should Buy an Employee’s Compensation Policy?

Business owners & employers

Contractors & subcontractors

Companies with on-roll or contractual workers

Organisations employing manual, technical, or field staff

Documents Required to Buy an Employee’s Compensation Policy Online

What is the Claim Process for Employee’s Compensation Insurance?

Submit the Claim Request

Incident Review & Assistance

Submit Required Documents

Insurer Assessment & Verification

Claim Settlement

Why Choose Coverfox for Worksmen Compensation Insurance?

Dedicated Claims Assistance

Quick Policy Issuance

Industry-Specific Coverage Options

IRDAI-Registered Insurers

Frequently Asked Questions

Protect your Employees with Workmen’s Compensation Now