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Ensuring employee safety in the workplace is one of the most important duties of every employer. Obtaining employee state insurance and a workmen compensation policy online are two of the most trusted and preferred forms of coverage for employee safety. However, both of these policies have significant differences and separate benefits that employers need to understand to make the right choice.
What is Workers’ Compensation Insurance?
Workers’ compensation insurance, also known as labour insurance, is a policy that protects employees against workplace injuries and related expenses. The primary purpose of the insurance is to provide financial support to the employees who suffer injuries, disable or unfortunate demise due to a workplace accident.
What is Employee State Insurance?
The Employee State Insurance (ESI) is a social security scheme that provides medical benefits, health insurance, and other welfare services to employees in India. The insurance was introduced under the Employees' State Insurance Act of 1948 and is administered by the Employees' State Insurance Corporation (ESIC). Moreover, the ESI has much broader coverage benefits, which include sickness, healthcare, maternity, and pension-like benefits for dependents.
Difference between Workers’ Compensation and Employee State Insurance
These are the differences that employers must note when buying an employee state insurance or workmen compensation policy online for their organisation.
Benefits of Workers’ Compensation Insurance
Financial Protection
The labour insurance policy provides financial support to employees in the event of a workplace accident. It covers the loss of their wage due to unemployment while they were recovering from the injury.
Medical Assistance
Workers' compensation insurance provides comprehensive coverage for all medical costs incurred due to workplace injuries. It includes hospitalisation, surgery, medicines, etc.
Provides Immediate Relief
The labour insurance compensation is provided immediately without any need to prove who or what was the cause of the workplace accident. Thus, ensuring immediate assistance to the injured employee in any way possible.
Provides Dependent Benefits
The labour insurance policy provides monetary benefits in case of an employee’s demise due to workplace injury. The compensation to dependents helps them maintain financial stability and provides them with a sense of security.
Benefits of Employee State Insurance
Free Medical Services
The employees enrolled under the Employee State Insurance get free medical services at ESI hospitals all across India. Moreover, the same benefit also applies to their family members.
Financial Assistance
The Employee State Insurance also provides financial support through monetary compensation for maternity leaves, medical leaves and for loss of wages due to disability or illness.
Includes Dependent’s Welfare
In the event of an employee’s demise, the Employee State Insurance provides monthly monetary benefits to the dependents to support their livelihood.
Summing Up
Both workers’ compensation insurance and employee state insurance play a crucial part in ensuring employee welfare in India. While labour insurance focuses on compensating for workplace injuries, illness, or death, the employee state insurance has broader coverage. ESI includes healthcare, maternity and medical leave benefits.
Ultimately, it is up to employers to make the right choice for the protection of their employees. However, they must always consider the benefit of their employees and organisations as well before making final decisions. By understanding the differences between these two types of insurance, employers can make informed financial decisions. Moreover, if an organisation chooses workers’ compensation for their employees, ensure that they select the right insurer, such as TATA AIG, which provides comprehensive coverage and a history of a positive claim settlement ratio.
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