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Workers' Compensation History
The need for a fair and equitable system of workers' compensation
evolved out of the industrial revolution. As economic and industrial
activities flourished, the number of work injuries also grew. The
increasing use of machinery, new concepts of producing goods, and
the pressure of increased demand for products resulted in more injury
problems without solutions for employers and employees. For the
most part, workers who were injured on the job had no recourse other
than to sue their employers at common law, an expensive and time-consuming
process. The court system was crowded, causing long delays. Compensation
for injuries was usually insufficient and uncertain. The employee
sometimes was forced to bear the expense of injury himself or had
to throw himself on the mercy of welfare.
This problem was first addressed in Europe during the 1800s, and
by the turn of the century the movement had spread to the United
States and Canada. Laws were enacted to provide workers injured
on the job with prompt, equitable, and guaranteed benefits. Injured
workers received medical care and disability income irrespective
of fault. Employers, in turn, were protected from potentially catastrophic
loss by a stated amount of specific benefits for the injuries suffered
by the employee. The worker was prohibited from filing suit while
the employer was obligated to pay the mandated benefits.
Only a few large employers had sufficient resources to guarantee
injured employees these mandated benefits without endangering solvency.
Therefore, the vast majority of employers purchased insurance protection
against these liabilities. Insurance was a necessity to stabilize
the increasing mechanization of the business community.
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