Is sub contractor responsible for accidental dealth compensation to deceased family?

Hi, 


Our case is regarding clash with a contractor upon a clause mentioned in our work order. 


My father is a sub contractor (sc) of a reputed mining company here (contractor). 

There are around 30-40 staffs under our payroll. 


We have signed work order last year and in the work order there is a clause 

which mentions "subcontractor shall insure his plant & equipment, Personnnel/Worker and other resources at his own cost for the tenure of sub contract work and shall produce the proof thereof to the company head office."


We never did and they never bothered us for this ever.


So recenrly, around a week ago, One of our operator(staff) died at the site, basically hit by the payloader machine. Staff/driver who was operating the machine has escaped from the site and he is "not" our staff but staff of the company(contractor). Payloader machine is also not our machine.


Now victim's family is asking for compensation. And company(contractor) assured them that they will be given insurance claim of approx 4 lacs, as it was accident where he died during "work" and they will initiate the procedure for the same. So family has gone back to the village without creating chaos or any kind of legal threats. They are poor, cant afford to. 


Now, Company is putting the contract to our face and sending a letter through post mentioning above clause and concluding the following:


"So, please note that for the incident that has happened at crusher site on x.x.2018, you shall be solely responsible for providing the claim compensation to the victim."


We cannot afford to do so, Our monthly billing amount is barely 3-4 lacs out of which only 20-30 thousand we take home. 


Since we have singed that work order we feel under pressure and have no idea what to do.