Workplace injury claims in India’s MSME sector have surged 31% year-on-year in FY 2025–26, with the manufacturing sector emerging as the most affected, according to the BimaKavach Workplace Risk Report 2026, released a day before Labour Day on May 1. The findings highlight a combination of rising industrial activity, improved reporting standards, and wider insurance coverage as key drivers behind the spike.

The report, based on insights from over 6,000 MSMEs across multiple sectors, indicates that factory and manufacturing environments account for the highest frequency of claims. Common causes include machinery-related accidents, slips and falls, and construction-linked risks. In contrast, the IT and technology sector reported near-zero claims despite having a strong base of insured entities, reflecting the relatively low-risk nature of desk-based operations.

Monsoon months drive peak risk

Seasonal factors are also playing a significant role in workplace injuries. The report notes that the monsoon period—June to September — accounts for 43% of total claims, with July alone contributing 13.4%, making it the single riskiest month. Slippery conditions, outdoor hazards, and operational disruptions during heavy rainfall significantly increase accident risk during this period.

Regional concentration remains high

Geographically, workplace risk is concentrated in industrial hubs. Maharashtra leads with 20.9% of total policies, followed by Gujarat, Karnataka, and Delhi. Together, these four states account for more than half of all policies, underscoring the clustering of economic and industrial activity in these regions.

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Compliance still the primary driver

Despite the rising incidence of workplace risks, insurance adoption among MSMEs continues to be largely compliance-driven. A significant 94.6% of businesses purchase workmen compensation insurance primarily to meet statutory requirements, rather than as part of a broader risk management strategy.

However, the report points to a gradual shift in mindset, with more businesses beginning to recognise the importance of employee protection and financial preparedness.

Digital adoption accelerates coverage

One of the key enablers of increased insurance penetration is digital adoption. The report highlights that 69.1% of policies are now issued on the same day, while over 82% are activated within three days—significantly faster than the traditional 3–7 day timelines.

Tejas Jain, Founder and CEO of BimaKavach, said, “At a time when conversations around worker safety are gaining importance, workplace risk is often underestimated until it starts affecting operations. With better reporting today, these gaps are becoming harder to ignore.”

He added that risks are no longer limited to physical injuries. “Compliance gaps, operational blind spots, and financial vulnerabilities often sit quietly until they surface at the wrong time,” Jain said, emphasising the need for a more proactive, data-driven approach to risk management.

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Structured risk management

The findings suggest that workplace risk in India is becoming more dynamic, influenced by sector-specific exposure, environmental factors, and evolving business operations. While compliance remains the primary trigger for insurance adoption, MSMEs are gradually moving toward structured and preventive risk management practices.

As businesses scale and operating environments become more complex, digital-first insurance solutions are expected to play a crucial role in making coverage more accessible, faster, and integrated into core business strategy.

The report underscores a clear trend: workplace safety is no longer just a regulatory requirement — it is emerging as a critical component of sustainable business growth.

Published on: Apr 30, 2026 7:14 PM IST