Workmen’s compensation is a term for the welfare of employees and compliance with workplace regulations. The Workmen Compensation Policy (WC) or WC Policy and Employee State Insurance (ESIC) are prominent schemes for such benefits in India.
While both aim to safeguard employees, they are different and serve different purposes. This blog will help you understand the significant differences between both schemes and choose the right option for your organisation. Let’s dive in!
What is a Workmen Compensation Policy?
A Workmen Compensation policy, or ‘WC Policy,’ is an insurance plan that assists employees who get injured, become ill, or die at work. This policy demands employers to pay workers for injuries or disabilities while doing their jobs. Businesses and startups must consider buying this insurance alongside other SME insurance plans to protect themselves and their employees.
Key Features of WC Policy
- Coverage: The WC Policy reimburses medical expenses, loss of wages, and restoration costs incurred due to workplace calamities or occupational diseases.
- Customisable Procedures: The association provides authentic policies for different enterprises and business needs.
- Lawful Observance: It allows observation of the Workmen Compensation Insurance, which covers employees and employers from possible legal disputes.
- Inexpensive: Workmen Compensation insurance cost is manageable, making it perfect for small and medium enterprises.
Benefits of WC Policy
- Financial security for employees and their families.
- Increase employer reputation and trust.
- Seamless claim settlement support from providers.
What is Employee State Insurance (ESIC)?
The Employee State Insurance Scheme (ESIC) is a government-initiated health insurance and social security scheme under the Employee State Insurance Act, 1948. It offers medical and financial assistance to employees earning up to INR 21,000 monthly.
Features of ESIC
- Coverage: ESIC has medical care, motherhood benefits, disability repayment, and funeral expenditures.
- Eligibility: Relevant to employees in organisations with 10 or more workers.
- Contribution: Both employees and employers donate a percentage of their salary to the ESIC fund.
- Government-Backed Scheme: Allows comprehensive medical and financial benefits.
Benefits of ESIC to Employees
- Access to quality medical care for employees and dependents.
- Disability and sickness benefits of ESIC to employees to compensate for wage loss.
- ESIC’s maternity coverage supports working mothers.
WC Policy Vs ESIC: Know the Difference
| Factors | WC Policy | ESIC |
| Coverage Comparison | Adaptable for workplace-related injuries and illnesses only. | Broader in scope, covering medical and social security needs. |
| Cost and Applicability | Based on the conditions, such as the nature of work and risk levels. | Contributions are fixed percentages of wages. |
| Legal Framework | Governed by the Workmen’s Compensation Act. | Operates under the Employee State Insurance Act. |
| Eligibility | Applicable to employees who are not covered under ESIC and engaged in hazardous work | Mandatory for establishments with more than 10 employees (or 20 in some cases) and employees earning below a certain wage threshold. |
| Benefits Offered | Provides compensation for workplace-related injuries, disabilities, or death, focusing on financial compensation. | Provides a wide range of benefits such as medical care for employees and dependents, maternity benefits, disability benefits, and unemployment allowance. |
Both options, i.e., Workmen Compensation Vs ESIC have unique strengths. While ESIC provides comprehensive benefits, the Workmen Compensation Policy focuses on workplace-specific risks. SMEs can rely on providers to customise solutions based on their needs.
Benefits of Choosing the Right WC Policy Providers
- Wide Coverage Options: Many providers offer industry-specific policies, allowing the right coverage for every business.
- Hassle-Free Claim Process: Simplified claim settlement for businesses of all sizes.
- Expert Guidance: The genuine providers support understanding policy requirements and legal compliance.
- Customised SME Insurance Plans: Adapting solutions for small businesses seeking cost-effective Workmen compensation insurance.
Conclusion
When it comes to safeguarding employees, both the ESIC and WC policy play necessary roles. The Choice depends on your organisation’s needs and employee demographics. For SMEs, solutions like Tata AIG’s SME Insurance provide adaptable options that blend affordability and comprehensive coverage.
By prioritising workmen’s compensation, businesses comply with legal mandates and foster a safer and more secure work environment. Remember, choosing the right policy allows a win-win for employees and employers alike.
FAQs
What is WC policy?
A Workmen Compensation Policy coverage is a Workmen Compensation insurance designed to protect employees from financial loss due to workplace injuries or illnesses.
Is ESIC applicable for a 25,000 salary??
No, ESIC coverage is available for employees earning up to INR 21,000 per month.
What is the difference between ESIC and EDLI?
While ESIC focuses on medical and disability benefits, the Employee Deposit Linked Insurance (EDLI) scheme provides insurance benefits linked to an employee’s provident fund.