Sigachi Blast Exposes Fatal Insurance Gap For Contract Workers

Among the victims was Abhishek Kumar, a young worker from Bihar. His death was confirmed by the Bihar government, which announced an ex-gratia of Rs 2 lakh. But no one from the company or any insurance representative has contacted the family so far.

Most of those killed were daily wage labourers or contract workers hired through contractors. They were not enrolled in employee welfare schemes, did not have appointment letters, and were not included in any company insurance policy. Their families are not eligible for any formal claim.

Only permanent employees earning above Rs 22,000 per month were reportedly given insurance coverage. The rest were completely left out.

Rajanala Venkat Jagan Mohan was one of the few permanent workers who died in the blast. His son, Rajanala Sai Yashwanth, filed a police complaint against the company, saying his father had raised concerns about faulty equipment but no one acted.

City-based lawyer Shilpa Iyer said that contract workers are always treated as invisible. “Without any formal documentation, their families cannot demand compensation through law. If the company gives them anything, it is voluntary. There is no legal obligation,” she said.

The state government also offered `1 lakh for the deceased and Rs 50,000 for the injured. But both are ex-gratia payments and are not tied to any insurance policy. There is no clarity on when or how this support will be given.

An insurance advisor Subrata Mandal said in India, the term fully insured is mostly about plant and machinery. “Unless employers take extra effort to insure their workers, especially contract labourers, their families are left with nothing when disaster strikes.”

According to IRDAI’s latest data, only 27 per cent of India’s workforce has life insurance. Among informal workers, the number drops below nine per cent. In high-risk sectors like chemicals and manufacturing, less than four per cent of contract workers have accident cover.

Anisha V, a senior advisor with a public sector insurer, said the cost of a group personal accident policy for a worker is less than a cup of tea per month. “But most companies avoid it because there is no mandatory rule for contractors or informal labour. This needs to change urgently.”

Bheem Rao was only 24 years old and had joined the factory just two days before the explosion. His name was not on any official list. His family has no documents to prove he worked there. The insurance advisors said that many families have no bank accounts, no nominee names, not even a mobile number that works.

“They are poor and unprepared. When they go to seek help, they are told their loved ones do not exist on paper. This has happened before. Families of workers killed in the LG Polymers gas leak and other factory accidents in the past also faced the same struggle,” Anisha told Deccan Chronicle.

Experts are now calling for a national policy that makes group insurance mandatory for all industrial workers, not just permanent staff. Without that, the most vulnerable people in dangerous jobs will keep dying without support.

Sigachi blast: insurance crisis in numbers

• 40 workers killed, most were contract labourers

• Most victims had no formal employment, no policy cover

• Company insurance applied only to permanent staff earning above ₹22,000/month

• 1 crore: Ex-gratia announced per deceased by Sigachi

• 1 lakh + 50,000: Ex-gratia announced by Telangana govt (death + injury)

Contract/daily wage - No ESI, PF,appointment letter or policy

Data:

Overall workforce with life insurance - 27%

Informal workers with insurance - < 9%

Contract workers in high-risk sectors - < 4% accident cover

Common issues faced by victims’ families

• No proof of employment

• No nominee or bank details

• Not listed in company records

• No access to insurance claims

• Only voluntary ex-gratia, no legal protection