Workers Compensation

Workers Compensation is a form of insurance providing wage replacement and medical benefits to employees injured in employment in exchange for mandatory relinquishment of the employee’s right to sue their employer negligence.

The trade-off between assured, limited coverage and lack of recourse outside the worker compensation system is known as “the compensation bargain.” One of the problems that the compensation bargain solved is the problem of employers becoming insolvent due to high damage awards. The system of collective liability was created to prevent that, and thus to ensure the security of compensation to the workers. Individual immunity is the requirement for collective liability.

Plans differ among jurisdictions. However, provision is made for weekly payments in place of wages, compensation for economic loss (past and future), reimbursement or payment of medical and like expenses, and benefits payable to the dependents of workers killed during employment.

Workers’ compensation statutes are intended to eliminate the need for litigation and the limitations of common law remedies by having employees give up the potential for pain- and suffering-related awards in exchange for not being required to prove legal fault on the part of their employer. The laws are designed to ensure that injured or disabled employees are not required to cover medical bills related to their on-the-job injury. They provide employees with monetary awards to protect the loss of wages directly related to the accident to compensate for permanent physical impairments.