Workmen Compensation Insurance For Small Business: Is It Necessary?

Small businesses and startups in India face multiple challenges that make survival difficult. One of the challenges is workers' injury, which poses a significant risk to their reputation and finances.

But with a workmen compensation policy, small businesses can navigate through this risk smoothly as it helps small businesses earn a positive reputation without straining their finances.

Read on to learn about workmen compensation and reasons why a small business requires it.

What is Workmen's Compensation Insurance?

Workmen’s compensation insurance is an insurance plan for the safety of employees from workplace accidents. Under this labour insurance policy, workers of an organisation receive financial assistance if they suffer from any injury or illness at the workplace.

When employees get sick or injured due to workplace accidents, the policy steps in to cover the medical expenses, rehabilitation costs, lost wages, etc. In case a worker dies due to an injury or illness, the insurance also covers funeral costs and financial assistance to the surviving family members. Besides, it also offers legal protection to the employer.

Why Do Small Businesses Need Workmen's Compensation Insurance?

In a highly competitive business environment where survival is difficult and competition is fierce, small businesses can bank on the assistance provided by workmen's insurance to compensate the workers.

Since small businesses lack resources, the weightage of employee compensation can disrupt their operations. Here is why workmen's insurance is necessary for a small business.

Legal Compliance

Workers’ compensation insurance is legally necessary for employers who run a business. Without WC insurance, a business may face penalties, fines and legal actions in some cases. Thus, by investing in workers' compensation insurance, small businesses can fulfill their legal obligations.

Foster Security Among Workers

When a small business offers injury compensation to its employees, they feel safe and secure at work. Receiving protection from the employer makes them feel valued and encourages them to put forth their best efforts.

Offers Legal Protection

Workmen's compensation insurance also covers the legal expenses incurred by an employer to fight any legal suit filed by the employee. It is a crucial element of WC insurance as it saves small businesses from bearing huge financial burdens in case of lawsuits.

Attracts Talented Workers

Small businesses that invest in workmen's compensation insurance are perceived as safe by potential workers. Thus, workers' insurance shows the small business in a positive light and attracts talented workers.

Enhances the Reputation

Investing in workmen's compensation plans also enhances the business reputation in the industry. It shows the business's ethical awareness and adherence to social responsibilities, which givess it a respectable position in the market.

Helps to Retain the Workforce

When small businesses show their commitment by providing workers' compensation insurance, the employees also show faith and prefer to work with the organisation for a long time. Thus, organisations can retain their workforce for extended periods and save on hiring and training costs.

Case Scenario

Let us consider a case scenario to illustrate why small businesses must invest in workmen’s compensation insurance. Suppose in a plastic manufacturing business, a worker sustains an injury due to the heavy machinery used in the unit. He requires immediate medical attention and surgery, which may include a considerable cost.

If the business owner has not invested in a suitable workmen's compensation insurance, he can land in trouble for a number of reasons. First, he will have to pay compensation to the worker as he has suffered an injury in the workplace. In this situation, he will have to incur a considerable expenditure related to the surgery, medication, rehabilitation, etc.

If he does not pay the worker, the worker may sue him, and he may file a lawsuit. Even in this case, the employer will have to spend a significant amount of money on the lawsuit as well as on workers' compensation.

Thus, having workmen's compensation insurance saves the small business from incurring several unnecessary expenses, legal hassles and reputation loss too.

TATA AIG Workmen Compensation Insurance: The Way Ahead for Robust Workers’ Security

Workmen compensation insurance plays a crucial role in ensuring your employees’ safety. While the policy is crucial for your employees security at the workplace, it is also a mandatory requirement by law. TATA AIG workmen's compensation insurance plan helps you to fulfill this obligation efficiently.

Their plans offer financial protection to employees in case of an accident, illness, or injury due to workplace incidents. Moreover, their plans are affordable and customisable, that are perfect for your small business needs and budget. They also enable you to secure the employees trust towards the business organisation.

With TATA AIG, you can get robust coverage at affordable rates for your small business.

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