Workers' Compensation: Insurance

Workers' Compensation
Employers are legally obligated to take reasonable care to assure that their
workplaces are safe. Nevertheless, accidents happen. When they do, workers
compensation insurance provides coverage.

Workers compensation insurance serves two purposes: It assures that injured
workers get medical care and compensation for a portion of the income they lose
while they are unable to return to work and it usually protects employers from
lawsuits by workers injured while working.
Workers receive benefits regardless of who was at fault in the accident. If a worker
is killed while working, workers comp (as it is often abbreviated) provides death
benefits for the worker’s dependents.
A work-related injury or illness must arise from and occur during the course
of employment. Medical expenses related to the treatment of a work-related
injury or illness may be covered under workers’ compensation. This
includes healthcare provider’s visits, hospital visits, physical therapy,
prescription medication, medical equipment, and any out-of pocket medical
expenses. Alternative treatments such as chiropractic care must be pre-
approved. Workers’ compensation also pays for a percentage of wages lost
as a result of an injury or illness. The absence must be related to a work
injury, and it must be authorized by a medical provider.
Worker’s compensation coverage refers to an insurance policy that protects

employees under state laws and provides medical care, death, disability, and
rehabilitation benefits for workers who are injured or killed while on the job.
The insurer agrees to pay all compensation and benefits related to the
insured employer's state's workers' compensation laws without any regard to
liability. Workers' compensation coverage premiums are based on the
employer's payroll and the type of duties its employees perform.
 Workers' compensation coverage A protects employees under state

laws.
 It provides medical care, death, disability, and rehabilitation benefits
for workers who are injured or killed while on the job.
 The benefits of workers' compensation are generally awarded on a no-
fault basis.
 Premiums are based on the employer's payroll and the type of duties
its employees perform.
The Workmen’s Compensation Insurance Business in India is controlled by

the Workmen’s Compensation Insurance Tariff (W.C.Tariff). The Tariff
provides for two types of Insurance as follows:
Table A: This policy provides indemnity to the Insured if any employee in the
Insured’s immediate service shall sustain bodily injury by accident or contracts
disease arising out of and in the course of his employment by the Insured in the
Business and if the Insured shall be liable to pay compensation for such injury
either under.
i. Workmen’s Compensation Act, 1923 and subsequent amendments of the

said Act prior to the date of issue of the Policy provided that the insurance granted
is not extended to include any interest and/or penalty imposed on the insured on
account of his / their failure to comply with the requirements laid down under the
W.C. Act, 1923, and
ii. the Fatal Accident Act, 1855 of at Common Law And in addition all costs
and expenses incurred with the company’s consent in defending any claim for such
compensation.
Table B: This Policy provides indemnity to the Insured against their legal liability
under the Fatal Accidents Act, 1855, and at Common Law. (This Policy is not
issued to cover employees who fall within the definition of “workmen” under the
Workmen’s Compensation Act, 1923, as amended).
Workers’ compensation insurance aims to help you cover the

costs of employee injuries or disease. It is a fundamental type of
business insurance from which most companies can benefit. In
some instances, it can be hard to understand what the coverage is
and how it works. There are a few key points to consider about
this coverage. Take a look at the three ways workers’
compensation covers your business.
1: Medical-Only Coverage
The first type of workers’ compensation benefit is medical-only. This
coverage occurs when the policy pays for the worker’s medical costs
after an incident. Most policies also have the ability to pay for the
worker’s lost time at work.
There may be a delay in when this kicks in. For example, most policies
require a three- to five-day waiting period. After that, the policy starts
to pay. This is one of the most common benefits.
2: Temporary Disability
Another way your policy can help is with temporary disability coverage.
This is one of the most common types of benefits paid by workers’
compensation. This type of coverage provides a payment to your worker
who is unable to work. It applies only when the employee suffers an
injury or illness as the result of a work-related task. Yet, when a worker
improves and goes back to work, this benefit stops.
Sometimes, the employee may come back to work before being fully
recovered. Therefore, you might have to make other accommodations.
This may mean fewer hours or duties. If this occurs, partial, temporary
disability may help if the worker is not receiving full compensation.
3: Permanent Disability
In some cases, the worker cannot come back at all. These cash benefits
go to workers who can no longer do their job. It only applies in
situations where the worker’s injuries relate to work tasks. Beneficiaries
are likely to have some form of impairment that is not likely to resolve.
That’s when this coverage will kick in.
Some individuals receive partial total disability. This can happen when
the individual cannot perform his or her duties, but can still work in
some capacity.
Workers’ compensation offers a variety of protections. Without it, your
company may have to pay these costs out-of-pocket. That tends to be
very expensive.
What is a self-insured Workers' Compensation program?
A. A self-insured Workers' Compensation plan (or a self-funded plan as it is also
called) is one in which the employer assumes the financial risk for providing
Workers' Compensation benefits to its employees. In practical terms, self-insured
employers pay the cost of each claim 'out of pocket' as they are incurred instead of
paying a fixed premium to an insurance carrier or to a state-sponsored Workers'
Compensation fund.
Why do employers self-insure their Workers' Compensation programs?

A. Employers typically choose to self-insure their Workers' Compensation plans
because it gives them more opportunities to control costs and ensure their injured
workers are receiving timely and proper care. Under a self-insured arrangement,
employers also pay claims as they are incurred, as opposed to paying costs up front
in the form of commercial insurance or a state fund policy. This 'pay as you go'
approach serves to maximize cash flow.

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What are the main benefits provided by workers' compensation?

What are the different types of benefits provided by workers' compensation?

Workers' Compensation

Worker’s compensation coverage refers to an insurance policy that protects

 Workers' compensation coverage A protects employees under state

The Workmen’s Compensation Insurance Business in India is controlled by

i. Workmen’s Compensation Act, 1923 and subsequent amendments of the

Workers’ compensation insurance aims to help you cover the

A. A self-insured Workers' Compensation plan (or a self-funded plan as it is also

Workers' Compensation benefits to its employees. In practical terms, self-insured

paying a fixed premium to an insurance carrier or to a state-sponsored Workers'

Why do employers self-insure their Workers' Compensation programs?

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