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Workers/Workmen Compensation Insurance

Workers Compensation Insurance

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What is Workers/Workmen Compensation?

Workers Compensation, also referred to as Workers Comp, is a type of insurance designed to provide wage replacement and medical benefits to employees who face any injuries while on the job during working hours. By purchasing Workers’ Compensation Insurance, a company can easily cover the costs of medical care, lost wages, and other benefits for injured workers. 

This policy also provides coverage in case the injury results in a partial, temporary, or permanent disability. Primarily designed for blue-collar workers, these plans are available for white collar jobs as well.

It must be noted that the Labour Law/Compensation Workmen's Ordinance allows you to defend yourself, as the employer, against any claim brought by the employee in addition to basic coverage. Chapter 8 of Federal Law No. 1980 governs compensation in the United Arab Emirates (UAE).

Who Needs Workers Compensation?

Workers Compensation provides coverage to workers against workplace injuries, illnesses, and even death. It covers any occupational illness or accident that occurs while you're working and leaves you with medical bills and a loss of pay as well.

Worker's Compensation Insurance is required in a majority of the free zones in the UAE. Companies operating in all industries are eligible for a workmen compensation policy.  Some of them are given below - 

  • Companies operating in free zones
  • Construction companies 
  • Companies involved in installation work
  • Retailers
  • Office occupants

Why Get Workers Compensation?

Workers compensation is a crucial insurance plan for any employer and their employees. Here are some reasons why employers should get workers compensation - 

  • It provides employers with legal protection from lawsuits filed by injured employees.
  • It provides financial security to injured employees or families of deceased employees by providing them with a portion of the wages lost due to the injury or illness. 
  • Workers compensation helps reduce the costs associated with workplace accidents and injuries. 
  • Employers can receive a discounted rate on Workers’ Compensation Insurance if they take the necessary safety measures to protect their employees. 
  • Workers comp insurance companies can also help an employer save money on medical bills if an employee is injured
  • The availability of Workers Compensation Coverage can benefit employers in recruiting and retaining high-quality employees. 
  • Employees feel secure in that they have a safety net if an unfortunate event happens at work.

Common Risk Scenarios in Workers Compensation

To understand Workers’ Compensation better, one must be familiar with the common risks associated with these plans. Mentioned below are some common risk scenarios for the same - 

  • Slips, trips, and falls at the workplace.
  • Injury while operating machinery.
  • Musculoskeletal disorders from repetitive motions.
  • Injuries from lifting or carrying heavy objects. 
  • Exposure to toxic substances or hazardous conditions.
  • Motor vehicle accidents related to work activities.
  • Long-term psychological impact due to stress.
  • Injury or death caused by the intentional act of a co-worker.
  • Injury or death due to employer negligence.

Major Inclusions of Workers Compensation

When it comes to Workers’ Compensation, certain inclusions are generally present in most policies - 

  • Medical bills, lost wages, and other benefits for employees who become injured or ill due to a work-related incident. Disability benefits, death benefits, and vocational rehabilitation costs are also included.
  • Legal expenses, medical costs, and wage replacement for employees unable to work due to illness or injury. 
  • Another vital aspect of Workers Compensation Insurance is the employers' compensation insurance. This insurance helps protect employers from potential financial losses due to work-related injuries or illnesses. 

Major Exclusions of Workers Compensation

When considering Workers’ Compensation Insurance, there are certain major exclusions that employers must be aware of - 

  • Injuries that are self-inflicted or intentionally caused by an employee are not covered by Workers’ Compensation Insurance. 
  • If the employee was under the influence of drugs or alcohol at the time of the incident 
  • Pre-existing conditions or diseases are not covered by Workers’ Compensation Insurance. 
  • Any injury or illness that occurs outside of the workplace or during a break or lunchtime will likely not be covered. 
  • Employers may also be exempt from providing coverage if they are considered independent contractors or volunteers.
  • Certain employers, such as those in the railroad industry, may be required to purchase a different type of Workers’ Compensation policy due to federal regulations.
  • Workers Compensation Insurance may also exclude coverage for injuries caused by war, riots, or other acts of violence.

Factors Affecting the Pricing of Workers Compensation

Workers Compensation Insurance costs, among the most important factors to consider before getting a plan, vary as per the type of business, the number of employees, and other factors. Generally, businesses with more employees and higher-risk activities will pay more for their Workers’ Compensation Coverage than those with fewer and lower-risk activities.

For small businesses, Workers’ Compensation Insurance costs can range from a few hundred to several thousand Emirati dirhams annually. For larger businesses, Workers’ Compensation Insurance may cost tens of thousands of Emirati dirhams or more, again depending on the company's size and activities.

It is advisable for businesses to compare the cost of different Workers’ Compensation Insurance policies before making a decision. With different companies offering different coverage levels, it's necessary to check each one carefully and select the one that best meets your needs. 

When selecting a Workers’ Comp Insurance company, make sure to review their customer service ratings, financial stability ratings, and the quality of their coverage - this can ensure that you get the best coverage at an affordable price.

We, at Policybazaar UAE, understand the importance of insurance plans that specifically cater to your requirements. With our world-class, cost-effective risk management strategies and solutions through insurance, you can have peace of mind and have your focus on fulfilling your goals.