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Employee's Compensation Insurance Policy

An Employee’s Compensation Insurance Policy, previously known as Workmen’s Compensation Policy, is a financial cover for businesses covering your legal responsibility if a worker gets injured or falls ill while doing their job. Whether it’s a small accident at a warehouse or a long-term health issue linked to workplace conditions, this policy helps cover medical expenses, lost wages and other related costs. It ensures both the employee and employer are protected.

This policy is ideal for employers of all kinds, from small business owners and contractors to large corporations, and anyone who hires staff, whether full-time, part-time or contractual.

So, if a delivery rider employed in a small organisation slips during work and fractures his arm. As the employer, the company would be responsible for covering treatment and compensation. With this policy in place, the financial burden doesn't fall entirely on the employers’ shoulders.

With IndusInd General Insurance, you get more than just coverage. Our policy offers fast claims processing, flexible coverage options and strong nationwide support. It’s designed to help businesses stay compliant with labour laws while also genuinely supporting employee welfare. Simply put, it helps you take care of your people and your business when it matters most.

Why Choose Us?

IndusInd Employee's Compensation Insurance (previously known as Reliance Employee's Compensation Insurance) is designed to provide financial support to cover legal liabilities and medical support for your employees in case of an unfortunate event of work-related injuries, illnesses or loss of life.

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Covers Varied Business Types

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Quick and transparent claims

Benefits of an Employee’s Compensation Insurance Policy

Financial Protection

Accidents happen, even in the safest environments. A single injury claim without insurance could lead to out-of-pocket expenses that affect your operations. With this policy, those costs are covered, helping stabilise and secure the business, even in the case of unexpected events.

Cover Legal Liabilities

Let’s say a contractual worker on-site gets hurt due to faulty equipment and files a claim against your company. As an employer, you're legally required to compensate them. This policy ensures you're meeting those obligations without risking penalties or legal issues by providing the necessary financial support.

Covers All Business Types

Whether you run a small manufacturing unit, a large construction project or an office-based business, the risks of accidents still exist. This policy offers protection for all types of businesses, ensuring your business is secure from legal obligations and employees’ compensation expenses, regardless of your industry.

Protects Employees

If an employee is injured while lifting heavy stock or using equipment, the medical costs and time off work can be tough to handle. And according to ETHRWorld, employee benefits expenses have increased by 30% between FY22-24, i.e. from ₹3.06 lakh crore to ₹4.16 lakh crore. This means that without insurance, compensatory expenses paid towards workplace injuries can affect your bottom line, so it’s important to stay insured.

Covers Treatment Costs

If an employee works in disease-prone working conditions, such as a diagnostic lab, there is a high risk of catching diseases or falling ill. In such cases, the employer is responsible for covering the related medical costs. To ensure these costs don’t affect your business, our insurance will help cover the treatment costs as per the employee aggregate*.

Customisable Coverage

Every business faces different risks depending on the nature of work and workforce size. This policy can be tailored to include higher coverage limits and specific job roles, including contractual employees declared during the buying process for unique risks, ensuring your protection aligns with your operational needs.

Employee's Compensation Act, 1923

The Employee’s Compensation Act, 1923 (earlier known as the Workmen’s Compensation Act) is a law that protects employees who suffer injuries, illnesses, disability or even loss of life due to their work. It makes it legally mandatory for employers to provide compensation in such situations, whether the worker is permanent, part-time or contract-based. However, the benefits are only eligible for those who are not covered under the Employees’ State Insurance Scheme.

This law is especially relevant in industries where physical work is common, like construction, manufacturing, logistics and even housekeeping services. It ensures that if something goes wrong on the job, the employee (or their family) receives financial support to cover medical treatment, lost income, or other related costs.

While the law places this responsibility on employers, an Employee’s Compensation Insurance Policy helps manage the financial side of it. It ensures that businesses stay compliant without facing unexpected expenses, while also supporting their workers when they need it most.

Compensation Based on the Employee's Compensation Act

The compensation that an employer is liable to pay depends on various factors, including the wages, type of injury, place of injury, age, etc. However, the compensation for death and disability is determined by the government and can change as per changes in laws. According to the latest updates, the amount on which the compensation is calculated has been raised from ₹8000 to ₹15,000 by the Ministry of Labour and Employment. Our Employee’s Compensation Insurance Policy helps businesses comply with the legal liabilities and cover the compensation amount.

Accidental Death

50% of the employee’s monthly * relevant factor or ₹1.2 lakhs*, whichever is higher.

Permanent Total Disability

60% of monthly wages * relevant factors or ₹1.4 lakhs*, whichever is higher.

Permanent Partial Disability

For injuries listed in Part II of Schedule I (WC Act), a proportion of the permanent total disability amount is paid based on the loss of earning capacity.
For injuries not listed, a qualified medical practitioner will assess the disability and determine the compensation amount.

Temporary Disablement

25% of the employee’s monthly wages is paid every half month, subject to policy conditions.

Note: This does not indicate the final benefit amount. This only depicts the calculation of compensation based on different conditions under the Employee’s Compensation Act of 1923.

Individuals who are liable to receive benefits under the Employees’ State Insurance Scheme (ESIC) are not eligible to receive benefits under this Act.

Types of Employee Compensation Insurance Policy

1 Named Policy:

This type of policy explicitly lists the names of individual employees who are covered, along with their respective details and coverage amounts. This provides clear, individual-level coverage but requires careful management to ensure all employees are included and the list is updated as needed.

Link to the Page

2 Unnamed Policy:

This is a more common type of policy in India, which provides complete coverage for all employees of an organisation. Instead of naming each individual, the policy covers all employees based on specified criteria such as job roles, salary levels or other categories defined by the insurer. This is a more convenient option for companies with a large or frequently changing workforce.

Link to the Page

Inclusions and Exclusions Under Employees’ Compensation Insurance

What’s Covered?

Accidental Injury or Loss of Life – Covers the liable compensation amount to cover bodily injury or fatality to employees caused during the course of their employment.

Temporary and Permanent Disability - Covers the fixed compensation amount to employees based on the Employee’s Compensation Act.

Occupational Diseases – Covers specified occupational diseases arising out of employment (as per the Employee’s Compensation Act schedule).

Injuries While on Duty – Includes coverage for accidents occurring at the workplace or while performing job-related duties outside the premises.

Multiple Legal Frameworks – Applies to liabilities under the Employee’s Compensation Act, Fatal Accidents Act, and Common Law.

What’s Not Covered?

Non-Employee Claims – Any claim by a person who is not employed by the insured (e.g., visitors, vendors).

Liability Outside the Scope of Employment – Injuries that occur when the employee is not performing duties related to their employment.

Contractual Liability – Any liability assumed by the insured under an agreement that is not mandated by the Employee’s Compensation Act or other applicable laws.

War and Nuclear Risks – Any injury, fatality, or disease directly or indirectly caused by war, invasion, hostilities or nuclear radiation/contamination.

Wilful Misconduct – Injury or loss of life resulting from the employee’s wilful disobedience or disregard for safety measures.

Who Should Buy an Employees’ Compensation Policy?

Industries like construction, manufacturing, mining and logistics often have employees exposed to physical risks. This policy helps cover compensation in case of injury, disability or fatality during work.

Employers with drivers, courier staff or on-site technicians can be liable for accidents that occur during duty hours. The policy safeguards against financial liabilities from such incidents.

From small manufacturing units to large production plants, any workplace with machinery, tools or hazardous equipment should have this coverage to meet statutory obligations under the Employees’ Compensation Act, 1923.

Households employing full-time domestic help and businesses hiring contract or temporary workers can also take this policy to protect against unexpected compensation costs in case of work-related injuries.

How to Choose the Right Workmen’s Compensation Policy Online?

Know Your Team’s Risk Level

Think about your employees' day-to-day tasks. A delivery rider faces different risks than an office admin; your coverage should reflect that.

Check Legal Compliance

Make sure the policy meets requirements under the Employee’s Compensation Act. This protects both your business and your team from legal issues.

Look for Coverage Beyond Just Compensation

Some policies also cover medical expenses, occupational diseases, and subcontractor liabilities, which is particularly useful if you work with vendors or on-site staff.

Compare Claim Support

Quick claims are essential. You do not want to be bogged down with paperwork and red tape when filing for employee compensation, so look for insurers with a good reputation for claim processing and customer service.

Consider Flexibility

Choose a plan that lets you adjust coverage as your team grows or roles change. It’s helpful for seasonal businesses or project-based work.

E-Policy and App Access

Having everything accessible online or through an app makes renewals, claims, and updates way easier, especially for small business owners who wear many hats.

How to Buy the Employee Compensation Insurance Policy Online?

Buying IndusInd Employee's Compensation policy is a simple and quick process. You can secure coverage for your business by providing a few essential details and completing the payment online.

Step

Enter Details

Scroll up to the top and enter your company and employee information.

Step

Select Policy Coverage

Choose a named or unnamed policy and any extra benefits.

Step

Review Quote and Policy

Check the coverage, premium and policy terms displayed.

Step

Pay and Receive Policy

Pay online to get your policy document instantly via email.

Employee’s Compensation Insurance Claim Procedure

Inform Us

Immediately notify us through our paid helpline - 022-4890 3009, WhatsApp number - 7400422200, via email at rgicl.services@relianceadda.com, or through the IndusInd Self-i App.

Submit Required Documents

Submit the completed claim form along with all supporting documents, such as the injured employee's medical reports, police reports (if applicable), and any other relevant paperwork.

Assessment and Review

We will review your submitted claim and all supporting documentation. Our surveyor will verify the details of the incident and the extent of the claim and process the claim.

Claim Settlement

Once your claim has been approved based on your policy terms and conditions, we will process the settlement and transfer the payout to the designated account.

Key Takeaways

Workplace accidents, while rare, can create significant financial liabilities for employers. In a recent report, a total of ₹204.64 crores was paid in compensation for just 3,613 workplace accidents, highlighting the high cost employers would need to pay per incident.

An Employee’s Compensation Policy safeguards your business by covering legally mandated payouts under the Employees’ Compensation Act, 1923. It ensures that employees (or their families) are compensated for injuries, illnesses, or fatalities sustained during the course of work, without the employer having to bear the entire cost from company funds.

Beyond financial protection, having this policy in place strengthens employee trust, supports compliance with labour laws, and safeguards your business reputation. Whether you run a manufacturing unit, operate in high-risk industries or employ field staff, our cover ensures both your workforce and business remain protected.

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Employees are an integral part of your business. So, our customisable policy helps businesses protect their workforce against accidents, fatalities or other legal liabilities and ensure the business keeps running smoothly.

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Frequently Asked Questions (FAQs)

Who is eligible for Workmen’s Compensation (WC) policy?

Any employer in India, including factories, construction companies, transport operators, mines, and other businesses employing workers covered under the Employees’ Compensation Act, 1923, can take a WC policy. It applies to both permanent and temporary employees engaged in manual, clerical, technical or hazardous work.

Is employee compensation insurance mandatory?

While the law does not mandate purchasing a WC policy, it is mandatory for employers to compensate employees for workplace injuries or illnesses under the Employees’ Compensation Act, 1923. A WC policy ensures these liabilities are covered by the insurer instead of being paid entirely by the employer.

What is the amount of compensation in the Employees’ Compensation Act?

Compensation depends on the employee’s monthly wage and the type of injury, death, permanent total disablement or permanent partial disablement. The Act provides specific formulas and factors for calculation. For example, in case of death, it is 50% of monthly wages multiplied by a relevant age factor, subject to minimum amounts fixed by the government.

What documents are required for workers' compensation policy?

Key documents include details of the nature of work, number of employees, wage records, accident history and risk assessment reports. For claims, documents like the First Information Report (FIR), medical certificates, wage slips and the accident report submitted to the labour commissioner are typically required. However, the list of documents varies based on the claim type, so check your policy document before initiating a claim.

What is the duration of the employee’s compensation insurance policy?

Most WC policies are issued for one year and must be renewed annually. However, short-term policies can be issued for specific projects or contracts, and the coverage period is mentioned clearly in the policy schedule.

What is the difference between WC policy and ESIC?

The WC policy is a private insurance contract that indemnifies the employer for compensation payable under the Employees’ Compensation Act. ESIC (Employees’ State Insurance Corporation) is a statutory social security scheme providing medical care and cash benefits to covered employees, funded through employer and employee contributions.

What is the time limit to report an accident to the employer?

An employee should report a workplace accident to the employer as soon as possible, ideally within 24 hours. The employer must then notify the Commissioner for Employees’ Compensation within the statutory timelines, usually within 30 days of the accident.

Are there any pre-existing health conditions that are excluded under Employee’s (Workmen’s) Compensation insurance?

Yes. The WC policy does not cover illnesses or injuries unrelated to employment, including pre-existing diseases, unless aggravated by workplace conditions. The injury or illness must be directly caused by the employee’s work or work environment to be eligible for compensation.

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