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As per the UAE federal law No.8 of 1980, employers must offer compensation to the employees in the event of an accident that occurred while performing their duties during the tenure of employment. This law applies to companies operating across the country including its special economic zones. To meet the mandatory requirement of the government all organizations are required to formulate a workmen compensation policy to develop a standard protocol in the case of an onsite accident.

The workmen compensation policy is mandated for all types of businesses and offered to employees working in all departments within the organization. The workmen's compensation insurance is one of the best ways that a company can use to monetarily compensate an employee in the case of an accident in the workplace.

Let us look at the different areas covered by workman compensation insurance. The major areas covered by workman compensation insurance include the following: medical expenses, expenses for repatriation, employers liability.

• Medical Expenses

Medical expenses related to treatments arising from work-related accidents form a major part of the policy coverage. The amount spent in the hospital is reimbursed by the insurer depending upon the premium paid and cover specified in the policy document.

• Expenses for Repatriation

Repatriation expenses are incurred for transporting the deceased person's body to their home country. This amount is covered by the workers compensation insurance.

• Employer’s Liability

An employee has the right to sue the employer under the common law or Sharia law and the insurance protects the employer against such claims. The premiums are fixed based on the employee's earnings, the premium amount is adjusted based on the same.

Other factors that influence the premium of the insurance include the following: risk in the business, nature of work, location of the organization, to name a few.

Components of Workers Compensation Insurance

While formulating a workmen compensation policy it is very important to know and understand the components of the insurance. The main components of workers compensation insurance include the following: work-related death, permanent total disability, permanent partial disability, temporary total disability, medical expenses.

• Work-Related Death

Work-related deaths can offer monetary compensation to the tune of 24 months' employee salary. The compensation offered is between a minimum of AED 18,000 to AED 35,000 maximum amount.

• Permanent Total Disability

Permanent total disability is a state in which an employee can no longer work in a business due to work-related injuries. In case of permanent total disability, the workers can receive monetary compensation to the tune of 12 months salary.

• Permanent Partial Disability

Partial disability incurred to a worker at the time of performing his/her duty can result in the insurer paying a portion of the work-related death compensation monetary rate. The compensation ratio depends upon the type and the percentage of the injury.

• Temporary Total Disability

In the case of temporary total disability, the employee is entitled to receive full salary for the first six months and a half salary for the next six months if the employee is unable to work due to work-related injuries. The compensation stops when the employee fully recovers and re-enters the workforce, or is declared permanently disabled, or dies whichever happens first.

• Medical Expenses

Medical expenses related to diagnosing and treating work-related injuries can be reimbursed by the employer as per the policy document specifications and premium paid by the employer.

• In a Nutshell

Every organization irrespective of the sector it operates and the number of employees that they operate should have a valid workmen compensation policy. It is best to sit with an expert to identify and customize the insurance plan that best serves the purpose of the employer.