Why Does Workers’ Comp Exist?
Having el seguro de compensación para trabajadores
is important if you have employees. It gives employees benefits to help them recover from work-related injuries or illnesses. You may have heard of this insurance referred to as workers’ comp or workman’s compensation
. Regardless of what you call it, this insurance can help cover your employees’:
- Medical expenses
- Lost wages
- Ongoing care costs
- Funeral expenses
If one of your employees gets workers’ compensation benefits, they can’t sue your business because of their injury or illness. Without this coverage, your business can end up in a workers’ compensation case and lawsuit
with expenses that you have to pay for out of pocket.
There’s a long workers’ compensation history that led to it becoming an important part of the U.S. workforce. Knowing how it started can help answer questions you may have, like “what is workers’ compensation insurance
The History of Workers’ Compensation
One of the earliest examples of a workers’ compensation system dates back to 2050 B.C.1
A law in Ancient Sumeria paid workers for their injuries. Similar laws were in place in Ancient Greece, China and other parts of the world.2
For example, under Ancient Arab law, if an injured worker hurt their ear, they got an amount of money based on surface area injured.3
The Industrial Revolution & Workers’ Compensation
The Industrial Revolution brought manufacturing to the forefront. This meant using factories and new machines to make goods at a large scale, but it also led to hazardous work conditions.4 People worked in cramped, poorly ventilated spaces, facing risks such as injuries and exposure to toxic chemicals.5
During this time, injured workers had to rely on the court system to get compensation, which rarely happened. Employers had three laws they could use to avoid liability. These laws became known as the "unholy trinity of defenses."6
- Contributory negligence meant an employer wasn’t at fault if the worker was in any way responsible for their injury.
- “Fellow Servant” Doctrine prevented employers from being held liable if another worker caused an employee’s injury.
- Assumption of risk was a doctrine that stated employees knew and accepted the risks involved with their work when signing a job application.
Because of these laws, it was rare for injured workers to get compensation. In fact, it was so uncommon that private organizations in Germany and England were created to offer disability insurance.7
Workers’ Compensation History in 19th Century Europe
In the late 19th century, Prussian Chancellor Otto von Bismarck enacted the Sickness and Accident Laws.8
- Employers’ Liability Law of 1871 gave limited protection to workers in certain factories, quarries, railroads and mines.
- Workers’ Accident Insurance of 1884 created a modern workers’ compensation system.
- Public Pension Insurance gave workers with a non-work-related illness money if they couldn’t work.
- Public Aid served as a safety net for workers who couldn’t return to work because of a disability.
Unlike the unholy trinity of defenses, Bismarck's system valued employees. It covered medical care and rehabilitation costs if a worker got hurt on the job. It also created a precedent that injured employees couldn’t sue their employers if they got workers' compensation.
Countries throughout Europe began adopting similar workers’ compensation systems for their workers. For example, England’s Parliament enacted the Workers’ Compensation Act in 1897, which was similar to Prussia’s law.9
When Did Workers’ Compensation Begin in the U.S.?
It took the United States 37 years for every state to pass its own workers’ compensation law
. Wisconsin was the first in 1911. That same year, nine other states had workers’ compensation acts. In the next nine years, 36 states passed laws. Mississippi was the final state to enact a workers’ compensation law in 1948.
The workers’ compensation system in the U.S. is similar to Bismarck’s.
U.S. Workers’ Compensation Laws History
- 1908: Federal Employers Liability Act enacted. This gave railroad workers compensation if they proved negligence for their injury.
- 1911: Wisconsin passes the Wisconsin Workers’ Compensation Act, the first state to do so.
- 1948: Legislators enact a workers’ compensation law in Mississippi – the last state to do so.
- 1990: Americans With Disabilities Act passes. This requires all workplaces to be handicap accessible and gives employees with a disability reasonable accommodations.
What Is the Purpose of Workers’ Compensation Today?
Although specific laws vary, most states require employers to carry workers’ compensation insurance. Without it, an employee who gets hurt or sick from their job wouldn’t get benefits to help them recover.
Learn More About Workers’ Compensation From The Hartford
There’s a lot to know about when it comes to workers’ compensation insurance. So, it’s important to work with an insurance company you can rely on. We’ve offered workers’ compensation insurance to businesses for over 100 years. Our specialists can help you understand the coverage requirements in your state. Whether you need a quote or help filing a claim, we’ve got your back. Obtenga una workers’ compensation quote
today and see how we can help protect your business.
4,5 Boston University: School of Public Health, “The Industrial Revolution”