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What’s the point of the workers’ compensation system?

On Behalf of | Nov 9, 2020 | Workers' Compensation

If you are injured or sickened at work, you generally have a claim for workers’ compensation benefits. Before 1912, you would have had to sue your employer for negligence. This was costly and uncertain.

Workers who lost their negligence suits had no recourse. When they won, the litigation was so expensive that they didn’t get the full amount they needed. And, the cost of a claim and litigation could easily put a small company out of business.

It wasn’t easy for workers to win negligence claims. There were several defenses employers could bring up, including that the worker understood the danger and assumed the risk. This didn’t encourage employers to focus on safety.

A new bargain for workers

In 1912, Michigan and most other states passed a new law to simplify the process of making injury claims and try to make it fairer. This new policy was called the Workmen’s Compensation Act.

Under the Act, which was later renamed, each side got something valuable. Injury claims became no-fault, meaning that workers no longer have to prove their employer or co-workers were negligent and caused the injury. It is now assumed that injuries and illnesses suffered in the course of your job duties are covered by workers’ comp. The defenses were eliminated.

In exchange, employers are no longer subject to negligence claims in most work injury cases, although there are exceptions. Further, the damages a worker can receive were reined in. Today, workers are entitled to wage loss benefits, medical treatment coverage and rehabilitation costs. They are no longer able to make claims for pain, suffering, or loss of life enjoyment, which they could claim before.

Workers’ compensation is now provided through a mandatory system of insurance. Virtually all public and private employers with three or more employees are covered by what is now the Workers’ Disability Compensation Act.

Workers’ compensation is a better system, in general, than the traditional suit for negligence. The system ensures that workers are covered in the vast majority of instances in which an illness or injury occurred during or was caused by their job duties. It also ensures that a workplace injury doesn’t necessarily bankrupt the employer.

That said, the system isn’t perfect. You may have a claim denied that should have been approved. Or, the insurance company may underpay your claim or try to limit your benefits. If you are having trouble with a workers’ comp claim, an attorney may be able to assist you.