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Workmans Comp

Workers Compensation Insurance offers insurance coverage for injuries or occupational diseases suffered at workplace and compensates for lost wages. It does not matter who was at fault.

Workmans Comp Insurance has been made compulsory in every state. However, in Texas, there is no such compulsion. The policy varies from one state to another in terms of the following:

Handling of claims

Death benefits

Disputes settlement

Evaluation of impairment

Cost control strategies

The state law may also provide for special exemptions in case of officers/owners, small companies, domestic workers, farm hands, and independent contractors.

Employers should ascertain that the insurance policy is in accordance with the state regulations for Workmans Comp Insurance. If an employer fails to carry the insurance policy or otherwise meet a states regulations in this regard, it can leave him to pay these benefits out of his own pocket, as well as pay penalties imposed by the state.

The Workmans Comp Insurance plays a major role in influencing business decisions to relocate or to expand in a state, and thereby, generating millions of jobs.

Workers Compensation Insurance provides indemnity in the following areas:

1. Loss of limbs.

2. Injury inflicted at work.

3. Medical treatment.

4. Wages (up to two-thirds of the employee's salary).

5. Death.

6. Lawsuits filed by injured employees.

Employees payable under the Workers Compensation Insurance are:

1. Permanent full-time staff

2. Part-time staff

3. Temporary staff


Employers have an option to self-insure their employees instead of purchasing the Workers Compensation Insurance policy. This would enable the employers to cover the costs flowing from on-the-job injuries themselves. An employer should always consider the financial status of his company while opting for self-insurance business. The state gives permission to the employers to self-insure. In other words, the rules in relation to who is eligible to self-insure differ from state to state. The Department of Insurance of the State decides if a particular business is required to purchase Workers Compensation Insurance.

Worker's compensation insurance in California

Workers compensation insurance is a very old indemnity policy in California. It does not matter who was at fault. The employees should receive compensation for injuries sustained in the workplace. This is an exclusive remedy for injured employees, when the employer neglectfully causes the injury. This insurance policy has also helped in eliminating the existing proceedings Workmans Comp over whether employers were negligent in causing injuries to workers.

California law prescribes three basic parts to the workers compensation system:

The benefit structure

This structure describes what and how much injured workforce are entitled to receive when they suffer an injury arising out of and in the course of their employment and resulting in death or disablement. The structure define six basic types of workers compensation benefits available, depending upon the nature, date and sternness of the worker's injury such as medical care, vocational rehabilitation services, temporary disability benefits, supplemental job displacement benefits, permanent disability benefits, and death benefits.

The benefit delivery system

In California, private insurance companies are authorized to provide workers compensation. These companies administer the Workers Compensation Insurance.

Once the employer becomes aware of any injury to a worker at the workplace, he should provide him with the minimal benefits to which the latter is entitled. The employer is liable to pay these benefits. In the benefit delivery system, the State supervises the proviso of workers compensation benefits. It also provides information and assists the employees and employers involved in the system, in resolving disputes if any.

The benefit financing system

In this system, the employers provide benefits to their employees with the help of adoption of any of the following three methods:

1. Self-Insurance

2. Private Insurance

3. State Insurance

Special funds

I. Uninsured Employers Fund

If an employee gets injured at his workplace, and his employer is uninsured, the employee is entitled

to be reimbursed for the same. However, an attempt can be made to recuperate the amount paid from the uninsured employer.

II. Subsequent Injuries Fund

If an employee suffers from permanent disability and sustains an injury at the workplace, the employer will be only liable for the injury sustained at the workplace.

Workers compensation insurance in India

It is the responsibility of the employer to purchase the Workers Compensation Insurance in accordance with the regulations prevailing in the state. Social security in India commenced with the advent of Workmens Compensation Act in 1923

The sole aim of the Act is to provide for the payment of compensation to workers and their families in case of industrial accidents and / or certain occupational diseases arising out of and in the course of employment and resulting in death or disablement.

The employers are liable to pay compensation to workers if the injury has been caused in the workplace. The compensation is not paid in lieu of negligence shown on the part of the employer. It is paid as per the norms given in the insurance policy.

The term workman includes persons employed through sub-contractors by a person fulfilling a contract with the railway. The worker loses the right of compensation if the accident is caused by a worker, who, at the time of accident, was either drunk or was taking drugs, or if it is caused by his noncompliance of rules or orders or his disrespect for safety measures.

The term wages include overtime pay and the value of concessions or benefits in the form of clothing, food, accommodation, etc. The amounts of compensation payable to a worker or his dependents are based on the nature and extent of disablement and his average monthly wages.

In order to protect the interest of dependents in case of fatal accidents, all such cases should be brought to the notice of Commissioner of Labor. The employer has to deposit the amount of reimbursement with the Commissioner within 30 days. If the employer denies his liability, the Commissioner must decide whether there is a ground for claim. The Commissioner may inform the dependents if there is a ground for claim.

In India, it applies to seamen and shipmasters of power driven ships or of non-power driven ships of 50 tons or more. Generally, it applies to organized industries and hazardous occupations including building and loading or unloading operations.

The insurance policy does not cover the following:

1. Persons working in administrative or clerical jobs.

2. Persons employed in casual work.

3. Persons employed in the Armed Forces.

4. Persons who earn more than $140000 per month.

The Employees State Insurance Act, 1948 is a legislation, which aims at bringing about social and economic justice to the labor class of the country. It offers compensation benefits to the employees incase of sickness, maternity, disablement, medical expenses, and funeral expenses to the workers injured at workplace.

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