Migrant workers in Noida were in for a pleasant surprise recently when they were handed out payments because the temperature crossed 42°C. As temperatures soar past dangerous limits, a first-of-its-kind heat insurance cover is compensating vulnerable migrant labourers, offering them timely financial relief during the most unbearable summer days.

Each insured labourer gets up to ₹3,000 under this scheme, helping them afford food, water, and basic medical care during heatwave conditions. The innovative, parametric insurance cover has been co-developed by Go Digit General Insurance, K.M. Dastur Reinsurance Brokers (KMD), and Jan Sahas Foundation. Previously, the trio had collaborated to offer air pollution-based insurance in Delhi-NCR. 

The heat insurance cover is designed to provide timely financial support to workers exposed to severe heat stress at their workplace. The unique heat-index-based insurance policy operates on a parametric model, which means payouts are automatically triggered based on weather data rather than the traditional method of loss verification. 

Amitabh Dewan, Head of Large Risks, Policybazaar for Business, said, "Parametric insurance is a modern solution designed to provide swift financial relief by linking payouts to pre-agreed weather or event thresholds — in this case, five consecutive days above 42°C. Unlike traditional indemnity-based insurance, which requires detailed loss assessments and documentation, parametric cover eliminates claim friction through pre-defined strike and exit parameters and agreed data sources, ensuring quick, objective, and transparent compensation. Over the years, this model has gained traction in sectors like renewable energy, where variables such as solar irradiation or wind availability are insured."

"Now, its use is expanding into critical but previously uninsured or underserved areas, such as logistics, cattle farming, rural credit, and vulnerable worker groups like gig and migrant labourers. This shift reflects both the growing climate risk and the need for innovative, inclusive protection tools that can provide real-time support to those who need it most," Dewan added.

This insurance is being rolled out in six cities—Delhi, Noida, Ghaziabad, Gurgaon, Faridabad, and Lucknow—and aims to protect migrant labourers whose livelihoods and health are at high risk during peak summers. Each city has a set temperature threshold between 42°C and 43.7°C. Workers receive the first-tier payout if this threshold is breached for five consecutive days. They receive an additional payout if the heat continues for 10 straight days. 

So far this year, India has reported more than 67,000 suspected heatstroke cases. Last year, it reported 374 heat-related deaths. Hence, this coverage could become a critical buffer for low-income workers.

Beyond temperature-based payouts, the cover includes a hospital cash benefit of up to ₹5,000. This benefit applies to any hospitalisation due to illness or accidental injury, regardless of whether the temperature threshold is breached, providing a dual layer of protection.

What makes this effort significant is that the entire premium is funded by Jan Sahas Foundation, making it free for the labourers. The initiative ensures speedy, transparent payouts and introduces a scalable model for tackling climate-related risks in the informal workforce.

According to Digit’s Chief Actuary, Adarsh Agarwal, the cover model proves that parametric insurance can address emerging environmental challenges with agility. Echoing similar views, KMD’s Ayandev Saha said a synergy between traditional and parametric insurance models could lead to comprehensive solutions to everyday problems.