In an exciting collaboration between Minet Malawi, Britam, and The Daily Times - Malawi's leading newspaper - we are thrilled to introduce a groundbreaking initiative that will redefine your Wednesdays. Welcome to the Insurance Insights Column – a weekly rendezvous with the world of insurance and contemporary issues that matter. Every article aims to illuminate the intricate landscape of insurance products and relevant topics that impact us all. The articles will be educative at all levels, catering to both practitioners and non-practitioners.
As published in The Daily Times (Malawi) on May 15th, 2024
In classic Latin, we read about a renowned scholar and writer by the name of Quintus Plinius. Plinius was a reasonably rich man. Apart from property, he had a retinue of slaves and used to take them wherever he went. When he was asked by a friend how he fed such a large number of slaves, he replied smartly, "my slaves do not eat what I eat but I eat what they eat." Kudos. Smart guy.
From his statement, you may have the impression that Plinius was a cost-conscious fellow. Quite the opposite. Plinius was a selfless man. He did not only eat from his slaves’ plate but was caring to the extent that he used to give compensation whenever his slaves suffered work-related injuries.
This is not, necessarily, the case in our modern labor market. Haven’t you read about some employers who lock up workers in workplaces on night shifts to avoid them from stealing? Have you not heard about some employers who turn workstations and public offices into boxing rings?
Nowadays, no day goes by without reading or hearing about workers getting injured or sick because of job-related accidents. In some cases, employers have even gone to the extent of beating their workers. In addition to pain and suffering, disabled workers must deal with loss of earned income, payment of medical bills, partial or permanent loss of limbs and job separation.
It is not surprising that the ministry of labor announced, in Lilongwe, at this year’s commemoration of World Safety and Health Day which falls on 7th May, yearly, that government is creating Workers Compensation Fund to cater for work-related accidents and occupational diseases.
This brings us to today’s topic - workers compensation insurance.
Workers compensation insurance started as a result of the hardships placed on workers who could not claim from their employer under common law. Under common law, it was difficult for the worker to claim from an employer for job-related injuries.
To be compensated, you had to prove beyond reasonable doubt that your employer was negligent and his negligence had consequently resulted into injury. The principle applying at the time was called ‘volenti non fit injuria’ - meaning you, as an employee had consented to run the risk of injury by being employed.
Under workers compensation insurance, a worker receives guarantee of compensation and an employer is protected from employees seeking damages in tort for work-related injuries. There are mutual benefits.
Workers compensation insurance is compulsory under Malawi’s Workers Compensation Act for all employers who have a ‘master-servant relationship’ with others. Cover is for loss of income and medical expenses that result from job-related injuries and occupational diseases.
Insured persons are salaried workers. If one is paid in material terms, then it is something else. Insurers need to know insured persons annual earnings to calculate premium and pay claims. Policy is issued in the name of employer. You, as employee, come in as a beneficiary.
For cover to apply, death or injury has to arise out of or in the course of employment. A claim for a night watchman who is attacked by thieves is admissible under workers compensation if he is injured whilst on duty. But if the watchman is injured while splitting firewood at home, cover will not apply. The claim falls outside coverage scope.
The other tricky part of workers compensation insurance is that the accident must occur while one is carrying out business activities of one’s employer. Cover does not apply to employees on moon-lighting missions. Cavate.
Income benefits may be paid after occurrence of certain incidents, namely - death, permanent disability, temporary and partial disability. Insurance caters for loss of earnings and medical expenses. Permanent total disablement refers to a case where an individual is unable to perform duties of any suitable occupation for the rest of his life.
The Workers Compensation Act limits payment by specifying maximum duration of benefit to either forty-two months of the injured person’s annual earnings or policy limit, whichever is lower. The total amount that a workers compensation insurer will pay in any one period of insurance, per policy, is limited at K5million and K2.5million per event where several employees are involved.
Views from the top are that most workers, especially domestic servants, go uncompensated, following work-related bodily injuries or death, due to ignorance. Until such a time when the Workers Compensation Fund is set up, there is, thus, need for authorities to ensure that all employers have in place workers compensation insurance as required by Workers Compensation Act and that workers – beneficiaries - make use of the safety net. Talk to us. We are here to serve.
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