Workers Compensation Definitions
There are many Workers Compensation definitions on the internet. I was recently interviewed by a college student on Workers Compensation for his term paper. He had asked if he could reference articles in the blog, which of course I allowed him copyright permission.
One question that he asked me is “What is Workers Compensation?” I started reeling off info on underwriting, claims, premiums, state laws/rules, etc. He then said, “No I was just wanting the basic Workers Compensation definitions . ”
I was reminded that we in the WC world become so wrapped up on the technicalities and legalities that we should possibly take a step back and look at the basics. I decided to google the definition of Workers Comp to see what results would appear.
The theme that stands out is the lack of one true definition of Workers Compensation. One can see why WC is a complicated subject even when trying to keep it simple.
According to Investopedia:
A state-sponsored system that pays monetary benefits to workers who become injured or disabled in the course of their employment. Sick pay may qualify as workers’ compensation under certain conditions. Workers’ compensation first appeared in the U.S. in the 1930s and 1940s.
The Legal Dictionary’s definition is very long and can be found here.
Merriam Webster’s Dictionary definition:
A system of insurance that reimburses an employer for damages that must be paid to an employee for injury occurring in the course of employment. Program through which employers bear some of the cost of their employees’ work-related injuries and occupational illnesses or disabilities. It was first introduced in Germany in 1884.
In Britain and the U.S. in the late 19th century, there was a movement to secure the right of injured workers to compensation and to improve working conditions through court decisions, employer liability statutes, and safety codes. By the mid-20th century most countries in the world had adopted some sort of workers’ compensation. Some systems take the form of compulsory social insurance; in others the employer is legally required to provide certain benefits, but insurance is voluntary.
The system of workers’ compensation serves as an economic incentive for employers to prevent accidents and illness among employees, since liability for medical costs and the income lost by placing workers in hazardous environments can easily exceed the costs of establishing safe working conditions.
Workers’ compensation is a form of insurance providing wage replacement and medical benefits to employees injured in the course of employment in exchange for mandatory relinquishment of the employee’s right to sue his or her employer for the tort of negligence. The trade-off between assured, limited coverage and lack of recourse outside the worker compensation system is known as “the compensation bargain”.
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