Workplaces are meant to be safe. However, despite all precautions, accidents still occur. These accidents may lead to minor injuries, serious harm, or even death. That is where a WC policy plays an important role in supporting the injured worker or their family.
A labour insurance policy helps ensure that workers or their dependents receive financial compensation in case of workplace-related injuries or death. Let us now understand what fatal and non-fatal accidents are under the Workmen Compensation framework in India.
What Is A WC Policy?
A WC policy, Workmen Compensation Policy or labour insurance policy, is an insurance policy that provides compensation to employees or their families in case of injury, disability, or death caused by work-related incidents. It also provides financial protection to employers against legal liabilities arising from workplace accidents.
The labour insurance policy is based on the Employees’ Compensation Act, 1923 and is mandatory for many businesses in India. It protects both the employer and employee by providing financial support to workers and shields employers from unexpected liabilities. The policy aims to ensure a fair and timely process for handling injury or death-related claims.
What Are Fatal Accidents?
Fatal accidents are those incidents that lead to the death of a worker. These accidents can happen due to machinery failures, falls from height, or exposure to toxic chemicals.
When a fatal accident occurs, the dependents of the deceased worker are eligible to receive compensation. This compensation is calculated based on the worker’s last drawn wages and age.
For example, if a construction worker dies due to a scaffold collapse, it is considered a fatal accident under the WC policy. The employer must pay the compensation to the legal heirs of the worker.
Under the Act, the employer must report such accidents to the insurance company within two days. They must also notify the WC Commissioner to proceed with the compensation to the employee.
What Are Non-Fatal Accidents?
Non-fatal accidents are those that cause injuries but do not result in death. These may include burns, fractures, sprains, or loss of limbs. Even though the worker survives, the injury can cause temporary or permanent disability. Compensation is provided under the labour insurance policy based on the level of injuries.
Non-fatal accidents are further divided into two types:
1. Temporary Disability
Temporary disability means the worker is injured and cannot work for a short period. For example, a worker who suffers a fracture may need bed rest for two months. In such cases, the worker receives a portion of their wages during the recovery period.
According to the law, the injured worker gets compensation every half month until they can resume work (within the next 5 years). This benefit continues until the doctor certifies the worker is fit to return.
2. Permanent Disability
Permanent disability means the injury has caused a lasting impact on the worker’s ability to earn. It is further classified into:
Permanent Partial Disability: Permanent Partial Disability includes loss of fingers, toes, or partial loss of eyesight or hearing. The worker can still work, but their earning capacity is reduced.
Permanent Total Disability: Permanent Total Disability means the worker is no longer capable of working in any role. For example, total blindness or paralysis. The compensation in such cases is higher and based on the degree of disability and the worker’s wages.
How Is Compensation Calculated Under WC Policy?
Reputable insurance companies like TATA AIG calculate compensation using specific formulas under the labour insurance policy. For fatal accidents, it depends on the worker’s age and monthly wage. For non-fatal accidents, the type and severity of the injury decide the amount.
- Death Compensation: Family receives 50% of monthly wages or ₹1,20,000, whichever is higher, if death occurs due to a workplace accident.
- Total Permanent Disability: Worker gets 60% of monthly wages or ₹1,20,000, whichever is more, for total permanent disability.
- Partial Permanent Disability: Compensation is based on reduced earning capacity for injuries listed in Schedule I of the Act.
- Temporary Disability: Worker receives 25% of monthly wages every half month, up to 5 years, for temporary disability.
A registered doctor must assess and certify the nature and extent of the injury for correct evaluation.
How To File A Claim Under A Labour Insurance Policy?
- Notify the Insurer: Submit a written notification within 2 days of the incident.
- Cooperate with the Investigation: An investigator will assess the claim. So, provide all necessary information during this process.
- Gather Required Documents: Collect medical reports, hospital bills, and any other relevant evidence.
- Submit Claim Form: Complete the claim form with details like policy number, insured’s name, worker’s name, and accident specifics. Submit it along with the gathered documents within 15 days of hospital discharge or 30 days in case of death.
- Claim Settlement: The insurer will review the submitted documents. Upon approval, the compensation will be disbursed, typically within 30 days.
Conclusion
Both fatal and non-fatal accidents can disrupt lives and bring emotional and financial stress. The labour insurance policy exists to protect workers and support their families in times of need. Employers must act responsibly and ensure compliance with the law.
Injuries may be unavoidable, but timely support is within our control. Let us create safer workplaces and offer support where it is most needed—after the accident.
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