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Labour Insurance
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What Is Labour Insurance Policy?

Employee’s compensation insurance helps provide compensation in case your employees suffer an injury at work, resulting in death, permanent or partial disability. It also helps you cover legal liabilities towards your employees as per the policy’s terms and conditions. This insurance is mandatory under the Employee’s Compensation Act 1923 (previously called as the Workmen’s Compensation Act, 1923). Workmens compensation insurance is commonly referred to as labour insurance.

How does labour insurance work?

Working of a labour insurance policy is simple. If your employee sustains an injury at work that results in his/her death or disablement, the policy pays a certain compensation as per different scenarios (see table):

Scenarios Compensation
Death 50% of the monthly wages of the deceased employee multiplied by the relevant factor or an amount of ₹1.2 lakhs, whichever is more.
Permanent total disablement 60% of the monthly wages of the injured employee multiplied by the relevant factor or an amount of ₹1.4 lakhs, whichever is more.
Temporary total disablement 50% of the monthly wages of the injured employee multiplied by the number of leaves taken

Why do you need a labour insurance policy in India?

Here are some reasons to have labour insurance:

Be legally compliant

Labour insurance is essential to be legally compliant under the Employee’s Compensation Act 1923. If you don’t have this insurance, you can face stiff penalties from law authorities. Such a penalty can bring disruption to your business and hamper revenues.

Prevents financial loss

Providing compensation to an injured employee can take a toll on your business. It can hurt working capital, especially when cash flow is tight. The compensation offered by labour insurance policy can help prevent significant financial losses.

Improves brand image

Having a labour insurance policy demonstrates that you are a thoughtful employer. It can go a long way in boosting employee morale and improving public perception of your company. A positive brand image helps attract and retain talent.

Who should buy labour insurance?

While any employer can buy labour insurance, it’s more beneficial for those operating in physically demanding fields/ domains where the chances of injury are high. These include:

  • Mining and heavy engineering
  • Construction
  • Transportation
  • Warehousing and logistics
  • Oil, gas and chemical

ICICI Lombard’s labour insurance policy: Inclusions and exclusions

Employee’s compensation insurance policy from ICICI Lombard includes indemnity against legal liabilities for employers and compensation to employees as per the policy schedule due to injury resulting in death or disablement. Exclusions include:

  • Exclusions
  • Medical expenses above 12 months
  • War, hostilities, terrorism and accident in place not specified
  • Occupational disease
  • Accidents under the influence of drugs, liquor
  • Suicide
  • Employees engaged in unspecified business

Read the policy wordings carefully to know the inclusions and exclusions.

Steps to buy labour insurance online

To buy labour insurance online:

  • Visit our official website here

  • Choose Workmen’s Compensation under ‘SME Insurance’
  • Fill out your mobile number, email, name of the company and pincode
  • Click on ‘Continue’
  • Follow the appearing instructions to buy the policy

How to file a labour insurance claim?

Follow these steps to file labour insurance claim:

  • Claim intimation

    Inform us regarding your claim here.

  • Assessment of loss

    An investigator will assess claim details to verify its authenticity.

  • Submit documents

    Gather and submit all necessary information related to the accident.

  • Submit claim form

    Submit the claim form along with relevant details, including policy number, name of the injured worker, etc.

ICICI Lombard Employee's Compensation Insurance Articles

Workers’ Compensation Insurance for Small Businesses: A Complete Guide

As a small business owner, your employees are your valuable assets. However, more important than having employees is the responsibility to protect them, especially in cases where they get injured or sick while on duty. This is where workers' compensation insurance kicks in. It is one of a handful of legally required insurance products and protects your business from potential financial risks. Without it, you could face fines, penalties, and even lawsuits.

1 Oct, 2024
How to Reduce Business Risks with Labour Insurance

Operating a business is risky. From uncertainties over finance to issues relating to employees, the challenges the unforeseen situations can bring can be overwhelming. However, prudent actions will go a long way in reducing such risks for the perpetuation of your business. Labour insurance is one of the most effective tools in your armoury. It covers not only your workers but also your business from potential financial and legal consequences.

1 Oct, 2024
Top Strategies for Employers to Reduce Workers' Compensation Claims

Workers 'compensation (WC insurance or WC policy) is a crucial component of employer as well as worker safety. It makes certain that workers that are hurt on the job are fairly compensated for their injuries. It shields employers from getting sued in the event associated with a legal issue. The secret to managing workers 'compensation is lowering or even getting rid of claims.

19 Sep, 2024

FAQs

What is labour insurance?

Labour insurance, also called employee's compensation insurance, is a policy that provides compensation to your employees in case they suffer injury resulting in death or disablement as per the policy’s terms and conditions.

What does labour insurance cover?

This insurance covers indemnity against legal liabilities along with compensation to aggrieved employees. Read the policy wordings to know the coverage in detail.

Is it important to buy a labour insurance policy?

Buying this policy can help you prevent major financial losses and also protect you from legal liabilities in case your employee suffers injuries at work. It can also help you improve your brand image.

What things should I keep in mind before buying labour insurance?

You need to be mindful of the coverage amount, policy inclusions, exclusions, claim settlement process and service quality of the insurer. Compare different policies and choose the one that best suits your needs.

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