Misconceptions about Workmen’s Compensation Insurance in the UAE

Introduction

In the workplace, accidents may occur, but employers don’t prioritize obtaining workmen’s compensation insurance due to misconceptions. What can be the misconceptions that confuse both employers and employees? Is it really that they don’t know about workmen’s compensation insurance? Well, it can be because there is no proper guidance in the insurance and policy about workmen’s compensation. For every business in the UAE, it is compulsory to have workmen’s compensation insurance.

This blog covers the misconceptions about workmen’s compensation insurance in the UAE between employers and employees. 

Common Misconceptions

Misconception 1: Employers are not necessary to own compensation insurance

In the UAE, there is a common misconception that employers do not necessarily own workmen’s compensation insurance. However, it’s mandatory to obtain compensation insurance under Federal Law No.8 of 1980, commonly known as UAE Labor Law, to provide compensation for workplace injuries or illnesses. Workmen’s compensation insurance is the most productive and efficient way for employers to meet these responsibilities and ensure the company can fulfill its obligations without any financial burden.

Misconception 2: Large companies only need workmen’s compensation insurance

In the UAE, a common myth is that only large companies require workmen’s compensation insurance due to the larger and more hazardous workplaces. However, Workmen’s compensation insurance is mandated for all businesses, irrespective of the size, because:

1. Legal compliance

The UAE labor laws encourage all employers, not just large companies, to get workmen’s compensation insurance. This insurance will cover medical expenses and compensation for work-related injuries or illnesses. Non-compliance can result in large penalties, even for small businesses.

2. Financial Security

The financial impact of not owning workmen’s compensation insurance is highly significant for a work-related injury claim in small and medium enterprises (SMEs). The absence of workmen’s compensation insurance accelerates the situation even worse, as the employer is forced to pay medical bills and extra wages for employees who are injured in the workplace, impacting the organization’s cash flow and profitability.

Misconception 3: Insurance Claims are always denied

A common misconception regarding workmen’s compensation insurance claims is that they are always denied, leaving employees unsupervised. Nevertheless, the reality is that the majority of claims will be authorized, provided that they adhere to the appropriate procedures and submit the requisite documentation.

Misconception 4: The cost of compensation insurance is too expensive

The major misconception about workmen’s compensation insurance is that employers believe it is a financial burden and too expensive. However, employers often fail to observe the potential long-term economic and legal benefits of having proper coverage. The truth is that the premium costs are typically lower than the potential expenses of workplace accidents or injuries without insurance.

Workmen’s compensation insurance is not just coverage to safeguard employees; it also protects businesses from unexpected financial losses and reputational damage.

Misconception 5: Workmen’s compensation claims is slow and ineffective

Several organizations believe that workmen’s compensation insurance claims in the UAE are not instantaneous and productive. If there is any delay in submitting the documents for an injured employee to claim the insurance, it will cause a delay in receiving medical support, potentially resulting in legal disputes and reduced workplace morale. Thus, with proper documentation, both the employer and the employee can benefit from the right coverage.

Misconception 6: Workmen’s compensation insurance is only needed in hazardous working environment

Many employers believe workmen’s compensation insurance covers hazardous working environments like construction, chemical, or manufacturing. Workmen’s compensation insurance offers coverage for all types of jobs, safeguarding both the employer and employee from unexpected financial challenges.

Misconception 7: High-priced insurance is the only kind that is always required.

Many companies in the UAE presume that only high-premium insurance plans offer adequate workers’ compensation coverage. This misconception can lead to unnecessary financial burdens; various affordable options still meet legal requirements. Insurance coverages will differ based on business needs and budgets. 

If high costs are assumed to be equivalent to better coverage, organizations may fail to observe meaningful and cost-effective plans that balance coverage quality and affordability without overspending.

About CoverB

CoverB is one of the best insurance service providers in the UAE. Based on company size, CoverB ensures that organizations pick the right policy for proper insurance coverage. From clearing misconceptions to obtaining workmen’s compensation insurance for many organizations, CoverB’s role as an insurance provider has been significant for both the employer and the employee.

Conclusion

Misconceptions among organizations are common, but making them clear safeguards both employer and employee. Also, workmen’s compensation insurance is not only for hazardous organizations like chemical, industrial, construction, or manufacturing; every organization in the UAE is mandated to have proper insurance coverage. This way, an employer can protect their employees from injury, illness, or death by compensating for their medical coverage. 

Connect with experts at CoverB today for tailored insurance service for all your needs!