Page 15 - Liability Insurance IC74

Guide for Liability Insurance

negligence on the part of the employer. This would mean
long drawn out litigation which is a time consuming and
expensive process. As the employee is in an weaker
position than the employer, it becomes very difficult for
him to prove negligence on the part of the employer and
claim compensation.

It often led to long drawn out expensive and time
consuming litigations. It was therefore felt necessary
and desirable to pass legislation which gave the
employees automatic right to claim compensation for
'employment accidents or diseases'.

This objective was achieved by the Workmen's
Compensation Act, 1923.

(b) How is the premium arrived at under the
Workmen's Compensation policy?

Ans. The premium was based on the Limit of Indemnity
'any one accident' and the turnover. The premium rates
were based on a market agreement entered into by
the four public sector insurers when the Law came
into place.

Currently insurers are charging premium as per the
rating guidelines filed by them with the Indian
Regulator.

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