Workers Comp Coverage Evolves Over Time

Today, many people go about their business with the peace of mind that comes with knowing they’ll be protected with coverage (providing benefits that include medical payments and wage replacement) that their employers obtain from workers comp insurance companies in the event they suffer an illness or injury while on the job-but it wasn’t always that way. Long ago, workers who got hurt on the job rarely if ever were compensated voluntarily; their only hope was to sue their employer in a civil court of law, a move that was frequently difficult, expensive, and failed to yield the desired outcome.

The first countries to change their ways

Germany is considered one of the first countries to adopt laws that protect workers hurt on the job by mandating provision of benefits to employees who were injured or became disabled on the job. Prussia followed, passing legislation in 1884 that provides benefits for workplace accidents that included payments to workers for their medical care and rehabilitation. Called the Workers’ Accident Insurance law, the law also included an agreement that prevented employers from being sued by employees in civil courts-a system that formed the basis for what is now the workers compensation system in the United States. England’s Parliament was not to be outdone, in the same timeframe passing the Employer’s Liability Act, which offered coverage for employees’ injuries on the job that occurred because of their employer’s negligence but excluded accidents that were the fault of other employees. The law was replaced in 1897 with the Workmen’s Compensation Act, which more closely followed the watershed law adopted years earlier in Prussia.

The United States came to embrace the concept of protecting workers injured on the job on a state by state basis, with Georgia and Alabama being among the first to enact laws in 1855. Twenty-six additional states followed their example by 1907, although the laws were flawed-the failed to truly address the problem, and none of them “embodies an actual compensation principle and most simply said, ‘prove [the injury or illness was the fault of the employer’] and sue,” according to Lloyd Harger’s Workers’ Compensation, A Brief History. The federal government adopted the Federal Employer’s Liability Act in 1908 at the urging of President Roosevelt, offering protection for some federal workers whose duties were deemed hazardous. And finally, in 1911, Wisconsin and Washington states became the first to adopt compensation laws that were similar to those in Europe, with employers agreeing upfront to offer medical payments and wage benefits, with employees giving up their rights to sue their employer.

Today, there is as vast array of workers comp insurance companies in the industry that provide this key coverage. Talk to your professional insurance agent for advice on choosing the one that offers the best coverage for the price that fits your company’s budget.