5 Reasons a Manufacturer Should Have Workmen Compensation Insurance

For any employer, his employees and their well-being is of utmost importance. An employee’s well-being is extremely important for the proper functioning of the organisation and its operations. As the name suggests, this policy acts as a shield for employers from their liability in case any of their employees meet with a hazardous accident while on duty. The Workmen Compensation Insurance comes into force at such critical junctures and covers the medical and hospitalisation expenses of the injured employee.


This policy is highly recommended that all organisations with at least 20 employees must avail this policy under the Workmen Compensation Act, 1923. It protects the employers from any liability arising out of death or disability suffered by the employees while on duty. It also enables the employers to compensate for any occupational diseases suffered by the employees.  

Why it is Necessary for Manufacturers?
There is an accelerated risk of physical injury, disablement, or death to the employees of a manufacturing business than any other kind of business. A manufacturer needs to consider the factors that make this policy the most significant one among all the group covers offered by insurers.

Greater Risk of Worker Accidents`

The manufacturing business or a manufacturer is more prone to face a situation in which the worker employed gets injured. Even the seemingly harmless and simple activity like apparel manufacturing and stitching faces a 2.5% of injury rate every year. More than 15% of this is serious and requires hospitalization, affecting work and wage both for the firm and worker respectively.

Plus, it may also require for the employer to shell out treatment expenses and recuperation costs for the worker, which can be difficult at times given the liquidity concern of the business. But with workmen compensation insurance, major expenses covered in the Act are taken care by the insurer.

Poor Skills and Training of the workers

Majority of the injuries caused to workers are made worse by the lack of familiarity with the equipment, and non-usage of safety equipment on the job. Taking the example of garment industry again, more than 40% of the injuries were reported to be because workers found the safety equipment uncomfortable and did not use it. Other industries share similar statistics, along with fast changing technology which often means that workers trained on older technology are working on a new one with which they may not be entirely familiar.


Much of such injuries lead to stoppage of work and leave for the employees which is another drawback. Although, workmen compensation insurance does not pay for the loss to the firm, it does pay for the obligatory.

Occupational Hazards

Manufacturing industries like plastic products, batteries, computer chips, electronic circuits etc. even the stone masons, create the risk of lifelong illness for the workers. Diseases like asthma, bronchitis, cardio-vascular problems, cancer etc. have also been reported among the workers of many industries which use minerals, sand, or hazardous chemicals in the process. Any such case can land the employer in financial and legal tangle which will be easier to handle with a workmen policy at hand.


Need for Vocational Rehabilitation

There have been cases where workers lost limbs, eyesight or hearing due to an accident in the workplace. Such events can damage an employer’s reputation if left unattended properly. Workers injured in such a way will need rehabilitation, and more often they are unable to shell out the necessary expenses.

With the workmen compensation policy in place these workers have a chance to cover such expenses and continue with their lives without having to become dependent on others. Therefore, such policy adds to the repute of the employer as well.

Compensation for the Lost Wages

In case of major injuries, temporary disability, and hospitalization, not only the firm but the worker also tends to lose the income, howeve