Workers’ compensation insurance is a specific type of business insurance that helps business owners provide wages and medical benefits to employees who have been injured on the job. In most states, workers’ compensation is required by law.
The origins of workers’ compensation date back to the 18th century when pirates ruled the oceans. Privateering (the gentleman’s term for piracy) was a dangerous occupation; taking booty (treasure) away from those who did not want to give it up led to sea battles, hand-to-hand combat and often injury. Because of the inherent chance of impairment, a system was developed to compensate injured “employees.”
Pirate ships worked out payment schedules for various types of injuries (e.g., a lost hand would receive a hook as a replacement and 100 pieces of gold). In addition to being compensated, injured crew members were allowed to remain on board and were offered less strenuous duty. As such, the first return-to-work program was created!
Today, employers purchase work comp coverage from insurance companies – similar to how you buy personal auto or home insurance – and the policy protects employees who work for that employer. If someone gets hurt on the job, the insurance company pays for lost wages, medical benefits, such as doctors’ appointments and medications, and other benefits to the employee.
The result is twofold: For the injured worker, workers’ compensation helps get you back on the path to health and work. For businesses, workers’ compensation coverage through a reputable provider means you’ll have the tools to keep your employees safe and the financial assurance of coverage when an injury occurs.