Question

Explain the basis behind workers compensation. What was the historical background that generated this line of insurance? What types of benefits does worker's compensation coverage provide? How does workers compensation work in terms of coverage, rating and premium generation?

Answer 1

Workers' Compensation Insurance, often referred to as the "Workers Comp", is a government-mandated program consisting of payments that the law imposes to be paid to an employee who is injured or disabled as a result of his or her work.The federal government provides its own insurance for federal employees, but each state has its own workers' compensation program. In most situations, injured employees receive insurance regardless of who is responsible for the injury. Because these benefits are a kind of insurance, they prevent the employee from suing their employer for covered injuries.

In the United States, before the enactment of federal legislation and US workers' compensation legislation, there was no official system to compensate the employees for damages suffered while working for an employer. The only remedy for the injured employee was to sue the employer under civil law or tort. In addition, the burden of proving the negligence of the employer was on the injured employee. Although the potential liability of the employer was unlimited, most of the time US courts have ruled in favor of the employer. Because of this, employees have to bear the expense of the medical expenses, lost wages and loss of future income. At first, the federal government decided that that workers compensation laws should be decided by each state. But in 1908, President Taft signed the first law requiring compulsory coverage by the employer of workers engaged in multi-state trading. The next 40 years each state passed on their own state programs and worker compensation laws.Wisconsin became the first state to pass a formal worker compensation program and mississippi the last state to do so.

The insurance provides for the following benefits:

1.medical expenses covered for injury or sickness

2.compensation in case of a permanent injury

3.compensation to worker family who has been killed on job.

If an employee collects the compensation then the he/she cannot sue the employer. The compensation does not close to help the pain and suffering one has to bear.