Dear J.Gopi Krishna
Its best to cover all 40 workers by W.C policy. Its better to have name wise coverage and not numbers.
Now a days apart from ESI coverage, employers try to cover the workmen by WC policy.
If your establishment is covered under ESIC then contract employees may also be covered , you may also contribute ESIC contribution as ESIC portal allows principal emp to file challan for contract employees.
If your establishment is in non-implemented area - in that case WC policy is very much required. Otherwise if contractor fails principal employer have to make WC payment.
Regards
Labour Law Advisory Services.