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ADVANTAGES OF HAVING A
COMPREHENSIVE POLICY |
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The aspect of liability towards employees under
Workmen's Compensation Act and beyond needs clarification. Let’s explain it
here through a scenario:
Mr.ABC has an Act Only policy covering his private car. He employs a paid
driver. While driving the vehicle, after dropping Mr. ABC at his office, the
vehicle collides with a truck and the driver dies on the spot.
Being an old car, Mr. ABC had nothing much to lose and that is why he had not
taken a Comprehensive Policy. However, the family of the driver lost their
income source.
As an employer, Mr. ABC is liable to compensate for the driver, since he was
driving the vehicle in course of employment. The Motor Vehicles Act, makes it
compulsory to insure liabilities under Workmen's Compensation Act.
Accordingly, the legal heir of the deceased driver filed an application to the
Labour Commissioner and an Award of Rs.1,50,000 was passed against the
employer. Mr. ABC, equipped with an Act Policy, approached the insurance
company, who in turn satisfied the Award .The legal heir of the driver received
the compensation from the Labour Court soon after and everyone was happy.
The liability for compensation as per the Workmen's Compensation Act, depends
on the wages of the employee and his age, and represents mainly the loss of
earnings
However, other losses representing mental pain and agony for the family, loss
of consortium, future expenses on dependents and loss of prospective earnings
are not accommodated in this compensation.
The legal heir of the driver, in the instant case then approached the Motor
Accident Claims Tribunal, demanding a compensation of Rs.1,00,000 towards these
losses. The Tribunal passed an Award of Rs.50,000, found reasonable as per
provisions of Common Law and Fatal Accidents Act.
Mr. ABC had an Act Policy which did not cover this liability and he was saddled
with the responsibility of satisfying the Court Order. You can imagine the
financial burden he had to bear. Had he taken a Comprehensive Policy, covering
his driver by payment of a small premium, he would not have to face this
difficulty. The insurance company would have paid this additional amount of
compensation too.
It is, therefore, always advisable to take a Comprehensive Policy covering
these liabilities.
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