Chapter 7: Worker Protections

History of Insurance

Workers' Compensation Insurance

Before workers' compensation insurance in the US, an injured employee had to prove employer negligence in the courts. While employers often won the cases, they were frustrated with the unpredictable nature of the situation. Ultimately, both employers and employees supported the formation of workers' compensation laws.

The idea of compensation for injuries extends back to ancient times. Recorded laws related to such compensation have been dated to about 2050 BC from the city-state of Ur in ancient Sumeria. Laws related to compensation for injuries continued to develop throughout history. However, the first modern workers' compensation laws were enacted in the late 19th century. German Chancellor Otto von Bismarck introduced the first modern workers' compensation laws, which were adopted in 1884. These two laws were called the Sickness law and the Accident law. England followed with similar laws in 1897.

In the United States, the first workers' compensation law was enacted in 1908. This law covered only certain federal workers, but it was the first form of social insurance in the US. In 1911, the first state laws related to workers' compensation were passed. Today, each state and the District of Columbia have workers' compensation laws. Separate laws cover civilian employees of the federal government, as well as several special circumstances.