H.Insured: What you need to know about workmen’s compensation – why employers must insure their employees

Every business owner’s dream is to make a profit by achieving set business goals. However, to achieve those business ambitions, employers need employees in good health and sound mind.

Workers remain the bloodline of every organisation, so any risk to employees affects the employer directly.

For employers, promoting an enabling environment for employees to thrive goes beyond providing a comfortable workplace or paying monthly salaries on time. Therefore, it is prudent for business owners to set a risk mechanism to cushion themselves and their employees should the unexpected happen. When personal and work challenges affect employees, this impacts business productivity, as they miss work or cannot deliver as expected.

Also, in the family-based cultural dispensation we live in, we are expected to support our families through tokens or donations in times of difficulty, e.g., death, personal injury. Therefore, employers must go the extra mile in such scenarios to help. Hence the need for a support mechanism called the ‘Workmen’s Compensation’.

Here’s an example to help clarify. Your worker who operates a cutting machine is seriously injured while using the device. They are hurt, hospitalised and unable to come to work. What happens next? How do you, as an employer, empathise while maintaining alignment with your business goals?

In the following paragraphs, I will share with you the benefits of the Workmen’s Compensation Act.

The Workmen’s Compensation Act 1987 (P.N.D.C.L. 187) makes it compulsory for any Employer of labour to compensate any worker who may sustain an injury in the course of employment, whether the employer is to blame or not, in the course of work. The Act specifically provides as follows:

1. Where an employee sustains a personal injury by accident arising out of, and in the course of employment, the employer is liable, subject to this Act, to pay compensation in accordance with this Act.
2. An injured employee shall not suffer a diminution in earnings while the employee undergoes treatment for injuries sustained through an accident arising out of and during employment.
3. Where an attending medical officer assesses incapacity in respect of an injured employee, the employer shall pay the injured employee compensation commensurate with the incapacity so assessed.
4. Subject to sections 3 and 4, where the injury results in death or serious and permanent incapacity, the Court, on consideration of the circumstances, may award the appropriate compensation under this Act.

The Act also spells out what the employer may not be liable for responsibility. For instance, section (5) says as follows:

The employer is not liable to pay compensation for an injury to an employee resulting from an accident that is attributable to the employee who has been under the influence of intoxicants or drugs at the time of the accident. These and many others are exclusions under the Act.

Significantly, the Act applies to “employees employed by the Republic and Private persons, except in the case of persons in the Security service. Essentially, their job is risky and may jeopardise the lives of these persons (secret service, etc.) once there are no alternative compensations for them.

You can get two types of policies for your employees, either the Workmen’s Compensation Policy or Group Personal Accident Policy.

• Workmen’s compensation is legally required (workmen’s compensation Act 1987 PNDC 187). It will indemnify the insured (Employer) against all sums for which the insured shall be liable to pay to an employee in the process of performing their official duty sustains an injury by accident resulting in death, permanent disability, temporary total disability and medical expenses.
• However, Group Personal Accident provides cover for death, permanent disability, temporary total disability, and medical expenses resulting from an accident while the staff is on or off official duty. In the event of death, permanent or temporary total disability, the insurance company shall pay the insured a limit of capital sum (usually annual earnings or multiples) provided to the insurer. The insurer shall pay the associated medical bills to the limit agreed upon where the staff sustains an injury.

Companies in some instances choose Group Personal Accident over Workmen’s Compensation because; Group Personal Accident covers the employee both on and off official duty whereas Workmen’s Compensation covers the staff only if they are on official duty.

Notwithstanding, some employers go the extra mile by buying both policies to cover all sections of their employees.

Whatever the decision may be, every employer must have an insurance cover that will take care of their employees and their dependents in the event of injury or death to the employee. Not only is this the legal thing to do, but also the most socially desirable. They must do well by doing good. Just like we do at Hollard Ghana.

Speak to your insurance broker or a reliable insurance company like Hollard Insurance Ghana or Hollard Life Assurance to guide you on how to insure you and everything and everyone you love.

>>> is an Underwriting Officer at Hollard Insurance, Tamale and can be reached on +233 (0)241220100