Workers’ Compensation Insurance

Workers’ Compensation (which formerly was known as workmen’s compensation until the name was changed to make it gender-neutral) and often abbreviated as Workers’ Comp, is a form of insurance providing wage replacement and medical benefits to employees injured in the course of employment in exchange for mandatory relinquishment of the employee’s right to sue his or her employer for the tort of 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 as a result of high damage awards. The system of collective liability was created to prevent that, and thus to ensure security of compensation to the workers. Individual immunity is the necessary corollary to collective liability.

Did You Know: What not having workers compensation can cost you – As an employer, not having workers’ compensation can cost your business a lot of money if someone gets injured on the job.