Workers Compensation and Employer Liability Worker’s Compensation Laws are written by, Federal and State Legislatures with the laws applying to those covered workers who are affected by work related accidents and occupational diseases. There are several types of plans, which provide Worker Compensation benefits. Click for Audio

Competitive State Plans Competitive State Plans: These plans are state run workers compensation plans that compete with private commercial insurers. These plans are most often very competitive in pricing.

Commercial Companies Commercial Carriers: These are the private competitive companies, which together are also referred to as the voluntary market. Across the country these competitive companies write the majority of the coverage for worker’s compensation benefits that are required by State and Federal Laws

Assigned Risk Plans Assigned Risk Pools: These plans are also called shared market plans. Assignments are made to each admitted company who writes this coverage within each state. These assignments are made in proportion to the amount of Worker Compensation business that each company writes voluntarily within the state

Monopolistic State Funds Monopolistic State Funds: These funds are established by a given state and are conducted as the exclusive market for securing worker’s compensation coverage. All employers who want coverage and/or who are required to be covered must secure coverage through these state funds. The states which now operate a Monopoly Fund are:  Ohio North Dakota Washington Wyoming

Elective Laws Elective Laws: These laws allow employers to either elect to remain outside of the provisions of the law or to go under the law. When employers elect to remain outside the law they normally are subject to legal liability under negligence and may be legally pursued by the injured worker who is seeking relief. For this reason most employers, who have this option, elect to be covered by the law and in turn make the financial arrangements (including insurance) to pay the mandated benefits should a worker be injured.

History of Worker's Compensation In the late 19th century the economy of the United Sates started a dramatic transformation from an agricultural based economy over to an economy based on manufacturing. This period is referred to as the Industrial Revolution in our history. One of the dramatic effects of this new economy was that companies would hire employees to work in factories, mines and on assembly lines. The work place put together new classes of workers who were developing their work skills and the evolving technologies which had not yet been perfected, to create an often dangerous workplace where employees became injured. These injuries were often serious in nature and many ended in death. The public, businesses and governments became more engaged in looking for ways to minimize these injuries and for dealing with losses after they had occurred. During this period, safety laws and later Workers Compensation Laws were passed to mandate safety rules for the workplace and benefits for those injured. Maryland passed the first law in 1902 and Wisconsin another in 1911 with other states following.

Statutory Benefits vs. Laws of Negligence Early compulsory laws were vulnerable to legal challenges because they made the program mandatory while avoiding our traditional legal liability process Common Law cases for negligence and Defenses for Employers.  The courts recognized that an employer did have certain obligations to employees. To satisfy these obligations the employer was expected to provide:  A safe place to work Safe equipment & tools Enforcement of safety rules Common law defenses provided basic defenses which could relieve an employer from responsibility of legal liability. These included: Fellow servant rule - the coworker is responsible Contributory negligence - the employee is responsible Assumption of risk - the employee knew of the risk when the position was accepted. THIS IS AN ABREIVATED VERSION OF THIS CHAPTER FOR DEMONSATRATION PURPOSES

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