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Workmen’s Compensation Insurance

Table of Content

What is Workmen’s Compensation Insurance?

Imagine one of your employees accidentally takes a tumble down the stairs at work and breaks a leg. Or another employee accidentally throws out their back lifting heavy office equipment. Despite the preventive measures and safety precautions taken, accidents at your workplace are inevitable. Workmen/Employee Compensation policy enables the employer to pay the compensation to the employees or their family in case of death or bodily injury (permanent partial disablement / permanent total disablement / temporary disablement) caused due to injury and accident at workplace (including certain occupational disease) arising out of and in the course of employment. This policy also provides coverage for medical expenditure, occupational disease, compressed air disease and terrorism.

Why is Workmen’s Compensation Insurance Necessary?

Statutory Requirement

Because of the essential nature of worker’s compensation coverage, it is legally required in India for employers (especially manufacturing units) that have more than 20 employees. There can be significant penalties for non-compliance, ranging from fines to criminal charges in the most extreme cases.

Attraction & Retention

A trusting relationship between employers and employees can make a significant difference in productivity levels. When employees know that you have their back in both good times and bad, they are more invested in their work and focused on the job at hand. Proving you take care of your employees will help you attract and retain the best workers in your area.

Advantages of Workmen’s Compensation Insurance

Protection for employees

This insurance will protect your employees in case of any injury or illness that is a result of their job, and help them back to work.

Protection for your business

Protect your own business by reducing the risk of financial losses in case one of your employees gets injured.

Protection against lawsuits

Having a workmen/employee compensation insurance will limit your business’s exposure to lawsuits, as it covers your employees' work-related injuries.

Features of Workmen’s Compensation Insurance

Accidental Injury

If your employees suffer any bodily injury due to an accident that occurred during the course of their employment, this insurance will cover the medical expenses incurred for treating such injury.

Occupational Illness and Diseases

Sometimes, workplaces can expose employees to some chemicals or allergens that can be harmful to them and cause illness. This policy will help cover any medical treatments if they get sick.

Disability Cover

Workplace injuries may sometimes result in temporary or permanent disabilities (like loss of sight or limbs) and this insurance can help pay their medical bills and replace some of their lost wages.

Death Benefits

In the unfortunate case that an employee loses their life in a work-related accident, it covers for any funeral costs and provides death benefits to their family.

Why buy Workmen’s Compensation Insurance from Raghnall?

One Point of Contact

No need to coordinate with multiple points of contact and third parties. With Raghnall, you only need to stay in touch with us and no one else.

Product Expertise

At Raghnall, we have specialized underwriters and product experts who take time to understand your business and offer the coverages suitable to your needs.

Best Deals

As a fully independent broker we customize coverage catering to your needs and provide the best price for most comprehensive coverage.

Who should buy Workmen’s Compensation Insurance?

If your business operations involve a lot of labour

Like, construction, transportation and logistics businesses.

If your business has a lot of employees

For example, Consulting firms, or I.T. companies.

If your business or company employs a lot of workers on a contractual basis.

Such as manufacturing, factories etc.

Factors to be considered before purchasing Workmen’s Compensation Insurance

Sum Insured

Make sure that you pick the right sum insured for your policy. Choose a workmen/employee compensation policy that allows you to customize your sum insured based on the nature of your business and the risk to your employees.


Always check the coverages and the exclusions in your workmen/employee compensation policy. For example, some standard policies may not cover medical expenses for occupational diseases. So, read through the terms and conditions so you won’t be surprised by anything later.

Claims Process

Claims are one of the most important parts of insurance, so look for a company that has easy to make claims and also a simple settlement process, as it can save you and your business a lot of hassle.

Value for Money

Evaluate all the factors together, consider the risks posed to your employees as well as the sum insured and the premium to find the policy that gives you the best value.

Frequently Asked Questions

It is mandatory for all employers (and manufacturing units) that have more than 20 employees, to have a Workmen's Compensation Insurance so that they have insurance benefits for workers or employees as per the Employees' State Insurance Act, 1948. Employers and companies with fewer than 20 employees will still need to have this insurance to comply with the Workmen's Compensation Insurance Act, 1923 and the Indian Fatal Accidents Act, 1855.

Occupational Diseases covers those diseases that are specified under Schedule III of Workmen or Employee Compensation Act. It covers those disease which arise due to nature of occupation. E.g., disease caused by use of toxic compounds.

Compressed air disease is one of the occupational illnesses covered under workmen compensation policy. It is a sickness attributed to the working environments where air pressure may be higher or lower than the normal surface air pressure. E.g., Underground or underwater works.

A workmen compensation insurance covers the employees (including those employed through a contractor but excluding casual employees) who is engaged by any commercial business against any injury caused due to an accident that occurred during the course of employment, as well as certain occupational diseases.

Contractual employees can be covered as an extension if they are specifically declared under the policy.

Worker’s compensation is for work-related injuries or illness. If your company is temporarily out of business because and you can’t pay your employees, that falls under business interruption coverage.

The sum insured depends on the salary of the workers. When a company wants to buy workmen’s compensation insurance, they need to disclose the number of workers by type and their average monthly salary.