THE ORIENTAL INSURANCE COMPANY LIMITED

ORIENTAL STAFF TRAINING COLLEGE

FARIDABAD
EMPLOYERS LIABILLITY INSURANCE
Under Employer's Liability Insurance which is also known as Workmen's
Compensation Insurance policy, legal liability of the employer which may occur due to employee's
personal injury due to accident or disease arising out of and in the course of his employment are
covered. This policy also covers costs and expenses incurred with company's consent in
defending any claim for such compensation.
There are various statutes under which a employer may be held legally liable in
addition to under common law as depicted in the following chart.
Employer's Liability
___________________|________________
|
|
Under Common Law
Under Statutes
|
__________________|___________________
|
|
|
|
|
|
Fatal Accident
WC Act,
ESI Act,
Indian Contract
|
Act, 1855
1923
1952
Act, 1862
|
|
|
|______________|
|
|
|
|
|
|
Liability and
Not covered in any
|
|
Compensation as
Insurance Policy
|______________ |
per act
|
|
Liability for Negligence &
|
Compensation as per Court |
Award
|
|
|
Covered under Table `B'
|
|_____________________|
|
Covered under Table `A'

MEANING OF THE WORDS "IN THE COURSE OF EMPLOYMENT" AND "ARISING

OUT OF EMPLOYMENT":
The words "in the corse of employment" mean "in the course of the work which the
workman is employed to do and which is incidental to it. The words "arising out of
employment " mean during the course of employment injury has resulted from some risk
incidental to the duties of the service, which, unless engaged in the duty owing to the master, it is
reasonable to believe that the workman would not otherwise have suffered.
TYPES OF POLICY : There are two types of cover available under Employers Liability policy
known as Table `A' and Table `B'. The coverage under both table A and B are as shown above in
the chart. Table`C' cover which was earlier in force, as also all regulations relating thereto under
workmen's compensation. has been withdrawn vide HO Circular No. HO/UI/MIS/4/85/CR/1284
dt.01.4.85.
TABLE `A' : Full indemnity against liability under the Workmen's Compensation Act, 1923 and
subsequent amemdments, Indian Fatal Accident Act,1855 and the common law, and to provide
compensation to employees to whom the WC Act does not apply based on the scale of
compensation provided by the Act.
TABLE `B' : Indemnity only against liability at common law and under the
accident Act, 1855 for employees to whom the WC Act does not apply.

Indian Fatal

RATING : This business is Tariffed. There is a WC Tariff in which rates are given in rupees per
mille except in certain cases which are rated per capita and apply to table`A' policies. The rates are
applied on the Total Annual wages of the workmen.When Table`A' policy is issued all employees
coming within the provision of the WC Act, 1923 and subsequent ammendments of the said Act must
be included.
TABLE A : Except in cases which are rated per capita the premium must be calculated at the
book rate on the total earnings upto Rs.48,000/- per annum and for the excess amount premium
shall be calculated at 6.25% of the book rate subject to minimum rate of Rs.2/- per mile per annum
or if not engaged in manual labour and provided all such employees are included, at a minimum
rate of Rs.1.20 per mille per annum.
1.

2. TABLE B : In the case of risk coming under the preview of the ESI Act,1952 Table `B' WC
policies are issued covering those members of the staff who are not employees within the
meaning of that Act provided all such employees in the insured's service are included therein.
For Table B policies the rate chargeable is 6.25% of the book rate for the trade with
a minimum rate of Rs.2/- per mille per annum, the premium to be paid on the total earning of all
employees.
MINIMUM PREMIUM : Rs.30/2

ADDITIONAL COVERS :
1. Occupational Diseases listed in part C of Schedule III to the WC Amendment Act, 1964 may
also be covered under the WC policy at an additional premium of 50% of the book rate.
2. Table`A' policies may be extended on the following scale to provide for the
payment of
medical,surgical and hospital expenses (including cost of transport to Hospitals) incurred by
the insured.
Limit Rs. 80/- per case - 12.5% additional premium
" "

120/- " "

15%

"

"

" "

160/- " "

17.5%

"

"

" "

400/- " "

20%

"

"

" "

800/- " "

25%

"

"

" " 1600/- " "

35%

"

"

" " 2400/- " "

45%

"

"

3. INSURED'S LIABILITY FOR CONTRACTOR'S EMPLOYEES :

It is permissible to include the risk of the insured in respect of the employees of contractors
at a premium calculated at the tariff rate for the work contracted for and charged.
1. In cases in which the contract is for labour only, upon the total amount of the contract.
2.In cases in which the contract is for labour and material, upon a percentage of the full
contract price to be determined upon the marits of the case, such percentage is in no case to be
less than 75% of such contract price.
3.In cases in which the contract is for labour,material and equipment upon a percentage of
the full contract price to be determined upon the merits of the case, such % in no case to be less
than 50% of such contract price. But where the insured is able to furnish a return of the actual
wages paid to employees engaged by the contractors, the premium should be
calculated upon the amount of such wages.
Endt. No.179 must be used in these cases.
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PROCEDURE FOR SETTLEMENT OF CLAIMS :

The procedure for settlement of WC claims are very clear and there is no need for allowing
such claim to end in litigation. Following are the steps for considering the WC claims.
1. Immediately on receipt of instructions from the insured about the injuries/death of any
workman,the claim is to be registered and the claim number allotted.
2. Immediately reply should be sent to the insured enclosing WC claim form with a request to
return the same with the medical certificate/postmartem report, as the case may be, alongwith
our printed medical report to be duly completed by the Doctor.
3. Evidence of the injured/deceased employed with the insured should be verified by calling for
Muster Roll or any other document.
4. Similarly, proof of age is also to be obtained.
5. There is no necessity for WC claims to be taken before the WC Commissioner. Efforts should be
made immediately to settle the claim as per WC Act subject to verification of all claim documents
and finding the same in order.
6. From underwriting point of view the wages adjustment statement should invariably be insisted
upon at the time of renewal or expiry. On the basis of wages adjustment statement, difference in
premium is required to be either collected from the insured or refunded as the case may be.
COMPENSATION AS PER WC ACT , 1923.
1. DEATH :
Monthly wages (Maxm.Rs.4000/-) X Relevant FactorX 50%
or an amount of Rs.80,000/- which ever is more.
2. PERMANENT TOTAL DISABLEMENT:
Monthly wages (Maxm.Rs.4000/-) X Relevant Factor X 60%
or an amount of Rs.90,000/- which ever is more.
3. PERMANENT PARTIAL DISABLEMENT:
Monthly wages (Maxm. Rs.4,000/-) X Relevant Factor X 60% X (%) of PPD as specified in
part II of schedule, or as assessed by the medical practioner.
4. TEMPORARY TOTAL OR PARTIAL DISABLEMENT :
a) 25% of monthly wages payable fortnightly or part there of where disability is more than 28
4

days.
b) 25% of monthly wages payable fortnightly or part thereof if disablement is more than
days but less than 28 days. If disablement is less than 3 days, no amount will be payable.
The compensation for temporary total or partial disablement will be paid for a maximum
period of 5 years. Half monthly payment should not be more than the difference ofwages of
half month prior to & after accident.
METHOD OF CALCULATING WAGES :
In this Act and for the purposes thereof the expression "monthly Wages" means the amount
of wages deemed to be payable for a month's service (whether the wages are payable by the
month or by whatever other period or at piece rates),and calculated as follows, namely :
a) Where the workman has, during a continuous period of not less than twelve months immediately
preceeding the accident, been in the service of the employer who is liable to pay compensation, the
monthyly wages of the workman shall be one -twelfth of the total wages which have fallen due for
payment to him by the employer in the last twelve month of that period.
b) Where the whole of the continuous period of service immediately preceding the accident during
which the workman was in the service of the employer who is liable to buy the compensation was
less than one month, the monthly wages of the workman shall be the average monthly amount
which, during the twelve months immediately preceidng the accident,was being earned by a
workman employed on the same work by the same employer, or if there was no workman so
employed, by a workman employed on similar work in the same locality.
c) In other cases (including cases in which it is not possible for want of necessary information to
calculate the monthly wages under clause (b) ), the monthly wages shall be thirty times the total
wages earned in respect of the last continious period of service immediately preceding the accident
from the employer who is liable to pay compensation, divided by the number of the day
comprising such period.
DEFINITIONS :
COMMISSIONER : means a Commissioner for Workmen's compensation appointed under Sec.
20.
PARTIAL DISABLEMENT : Partial disablement means where the disablement is of a temporary
nature, such disablement as reduces the earning capacity of a workman in any employment in
which he was engaged at the time of the accident resulting in the disablement as reduces his
earning capacity in every employment which he was capable of undertaking at that time; provided
that every injury specified (in part II of schedule I of WC Act ) shall be deemed to result in
permanent partial disablement.
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TOTAL DISABLEMENT : Total disablement means such disablement, whether of a temporary or

permanent nature, as incapacitates a workman for all work which he was capable of performing
at the time of the accidnet resultingt in such disablement.
WAGES : Wages includes any privilege or benefit which is capable of beingestimated in money,
other than a travelling allowance or the value of any travelling concession or a contribution paid by
the employer of a workman towards any pension or provident fund or sum paid to a workman
to cover any special expenses entailed on his by the nature of his employment.
ACCIDENT AND INJURY : The word `accident' means an untoward mishap which is not xpected or
designed by the workman. Injury means physiological injury. Accident and injury are distinct in
cases where accident is an event happining externally to a man but accident may be an vent
happening internally to a man and in such cases `accident' and `injury' coincide. Such
cases are illustrated by failure of heart, bursting of an aneurysm and the like, while the workman
is doing his normal work. For example, a workman, an assistant driver in railways received a heart
attack on duty and died of the same, is an `accident' in the course of employment.
RELEVANT FACTOR : Relevant Factor is the factor given under schedule IV of the WC Act
gainst completed years of age on the last birthday of the workman immediately preceding the
date on which the compensation fell due.
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