Why do we have workers’ compensation insurance?
If you are injured because of someone else’s negligence, you can file a lawsuit and they are required to compensate you, right? Why isn’t that enough when a worker is injured on the job?
At Axelrod and Associates, we help clients who have been injured on the job, whose only recourse is to make a claim through their employer’s workers’ compensation insurance, and who often have an uphill battle forcing workers’ compensation insurance companies to pay their claims…
Is worker’s compensation intended to protect workers or does it protect corporations?
Below, we will discuss the problems with compensating workers for on the job injuries throughout history, and how we ended up with the sometimes-frustrating compromise of mandatory workers’ compensation insurance.
Why do we have workers’ compensation insurance? A *brief* history of workers’ rights to compensation may help to understand how we ended up with the system that we have in SC today.
Although workers’ compensation laws as we know them have only been on the books for the last century or so, the idea of mandatory workers’ compensation goes back as far as written history can take us:
The history of compensation for bodily injury begins shortly after the advent of written history itself. The Nippur Tablet No. 3191 from ancient Sumeria in the fertile crescent outlines the law of Ur-Nammu, king of the city-state of Ur. It dates to approximately 2050 B.C.
The “law of Ur,” the later Code of Hammurabi, and comparable laws in ancient Greek, Roman, Arab, and Chinese societies all contained provisions that are strikingly similar to today’s workers’ compensation laws in SC, including compensation schedules, determinations as to a person’s level of disability or impairment, and set amounts to compensate for specific body parts:
The law of Ur provided monetary compensation for specific injury to workers’ body parts, including fractures. The code of Hammurabi from 1750 B.C. provided a similar set of rewards for specific injuries and their implied permanent impairments. Ancient Greek, Roman, Arab, and Chinese law provided sets of compensation schedules, with precise payments for the loss of a body part.
Fast forward to the middle ages in Europe, the Industrial Revolution, and the English common law that was adopted by early America, and we see that employers were finding increasingly creative ways to deny compensation to injured workers.
When there was no longer a mandatory system of compensation for workers, employers began to rely on the tort system to deny compensation through legal defenses such as assumption of the risk and even by forcing employees to sign “right to die” contracts, waiving their right to sue for injuries or death, before employers would agree to hire them…
From the employer’s point of view, mandatory workers’ compensation laws represent tort reform.
No one likes getting sued. Employers are in business to make money and not to provide health care for their employees.
A steady stream of lawsuits by employees who are injured on the job leads to complaints that people are faking their injuries, unexpected operating costs, and, sometimes, bankruptcy when an employer is hit with a particularly large verdict for a severely injured employee or an employee who has been killed.
But, if the employer must pay for every injury, aren’t they paying more?
No, because 1) the risk is now spread among all employers through workers’ compensation insurance, and 2) each employee is not fully compensated through workers’ compensation insurance.
The employer no longer bears the risk of large verdicts in severe cases, the amount that an employer pays to each injured employee is significantly less, and, although insurance companies will dispute every claim whenever possible, there is less litigation than there was when compensation relied on the tort system.
Although workers’ compensation pays for lost wages, economic loss, and medical expenses, it does not pay full value. Furthermore, pain and suffering, punitive damages for gross negligence, and other areas of damages are unavailable to the injured employee.
Workers’ compensation laws are “tort reform” – they are designed and intended to protect corporations’ bank accounts by preventing workers from receiving full and fair compensation…
Workers’ compensation laws also protect employees, however.
When employees must sue their employer in the tort system to force their employer to compensate them, many employees don’t get compensated. If an injury was due to the employee’s negligence, for example, they are out of luck and out of a job.
Mandatory workers’ compensation laws don’t just protect employers – they ensure that employees get compensated, even if the compensation is less than they should receive.
The tradeoff is that no-fault workers’ compensation ensures that everyone gets compensated when they are injured on the clock, even if it is not full and fair compensation. And employers can no longer refuse to pay by citing legal defenses that were previously available to them under the English common law like:
Workers’ compensation attorneys often complain that their clients do not receive full and fair compensation, but the workers’ compensation laws are truly a compromise that benefits employees as well as their employers.
If you have been injured at work and believe you are entitled to workers’ compensation benefits, your SC workers’ compensation attorney can help you to file your claim, negotiate with the insurance company, present your medical evidence, and file any necessary appeals.