February 10, 2022 | Workers' compensation

Workers’ compensation is a system that pays injured workers so they can cover their medical bills. Unlike a lawsuit, workers’ comp is automatically granted to qualified injured workers without determining fault. You get a workers’ comp payout by filing a claim through your employer.

A brief history of workers’ comp programs

The idea of paying injured workers isn’t a recent concept. There were similar programs in effect in ancient Greece, China, and Sumeria dating back to 2050 B.C. However, carrying this insurance didn’t become a legal requirement for businesses until more recently.

Prior to workers’ comp programs, injured workers had to file a lawsuit to recover compensation for their injuries. However, workers rarely won their cases because there were a few laws that let employers off the hook.

Nineteenth century Europe began creating laws in support of employees that included compensating injured employees. Soon, the United States followed. However, it took 37 years for all U.S. states to create workers’ comp laws.

What is workers’ compensation?

In simple terms, workers’ comp is an insurance policy held by employers that compensates workers who become injured on the job. It’s a no-fault insurance policy, so it doesn’t matter who caused the accident that led to the injury – employers receive compensation regardless.

For example, when a worker falls off of a ladder, slips, trips, or is injured by machinery, they’re entitled to compensation through workers’ comp. That is, as long as their employer carries a policy.

What businesses are required to carry a workers’ comp policy?

Today, workers’ comp is a pro-employee compensation program that is required by law in most circumstances. In some states, small businesses with four or fewer employees aren’t required to carry a policy.

However, in Nebraska, all employers and contractors with one or more workers are required to carry workers’ comp insurance. There are a few exceptions for certain industries including railroad employees, federal employees, household/domestic servants, and some employees working in agriculture.

How does workers’ comp work?

When you’re injured on the job, your first line of recourse is through your employer’s workers’ comp program. If your employer has no policy, you’ll need to sue your employer in a court of law to receive compensation.

The process is fairly straightforward. First, you’ll file a claim through your employer and they will submit the claim to their insurance company. The claim will be investigated and then approved or rejected.

Rejected claims can be appealed, and if a claim is rejected again, you can sue your employer. However, you can’t file a lawsuit until all workers’ comp options have been exhausted.

The reason you must go through workers’ comp first is because these programs were designed to take pressure off of the court system. Prior to workers’ comp, courts were flooded with claims, which pushed out all the other cases waiting to be heard. Workers’ comp is supposed to be an easier, faster way for injured employees to get compensated.

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What is Workers Compensation?