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Shocking Discovery – Workers Compensation Insurance Began 2050 BC

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Ancient Sumeria Invented Workers Compensation Insurance

The origins of Workers Compensation Insurance is much more ancient than in the early 1900’s.  I had always thought the beginnings of the WC system involved merchant ships or started in Wisconsin.

Map Of Wisconsin Workers Compensation Insurance With Badge
Wikipedia

This article from the State of Wisconsin Department of Workforce Development  (DWD) refers to 1905 as the actual start of some type of WC system.  In Wisconsin the employer has three common law defenses to paying an injured worker.   The three defenses were that the:

  1. worker was also negligent, 
  2. worker knew of the dangers involved and “assumed the risk,” or 
  3. injury occurred because of the negligence of a “fellow employee.” 

Under this archaic workers compensation insurance system it was very difficult for workers to recover against their employers. If they won, however, there were no dollar limits on what a jury could award. 

The article from the DWD goes on to say Wisconsin in 1911, adopted a Workmen’s Compensation Act.  Please refer to the passage at the end of the article for the first US Work Comp system.   The reason I moved it to the end of the article is that WC (of a sort) was in force at the time of the beginning of written history.  

I was able to uncover an incredible article that footnoted a book that placed the origins of WC in ancient Sumeria in 2050 BC. Yes, WC is that old. The article was produced by Gregory Guyton, Dept. of Orthopedics, University of North Carolina. The article seems to be the most authoritative one I have found on ancient WC systems.  It can be found here. 

From the article – “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 provided monetary compensation for specific injury to workers’ body parts, including fractures. 

Graphic Of Dollar Sack Workers Compensation Insurance In White Background
StockUnlimited


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.”

One caveat is there were no actual payments for  Temporary Total (TTD) or Temporary Partial Disability (TPD)   Only Permanent Partial Disability (PPD) was considered in ancient times.  The amazing footnote to ancient PPD is that they were based on schedules very similar to the state mandated schedules of today. The bottom line is PPD is much older than TTD or TPD payments. 

footnote – Wisconsin– This remedy is essentially a “no-fault” system under which a worker no longer has to prove negligence on the part of the employer, and the employer’s three common law defenses are eliminated. The intent of the law was to require an employer to promptly and accurately compensate a worker for any injury suffered on the job, regardless of the existence of any fault or whose it might be. In return, the WC Act limited the amount of money that a worker could recover. Thus, workers are only entitled to:

Employee Workers Compensation Insurance Benefits
StockUnlimited
  • certain wage loss benefits, 
  • the cost of medical treatment
  • certain disability payments and 
  • payments for vocational rehabilitation retraining. 

Under the pre-WC Act tort system, workers had been able to recover for pain and suffering, loss of enjoyment of life and other damages that a jury might award. This is no longer possible under the WC Act.

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James Moore

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Mgmt Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications

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