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How Work Comp Protects You

Retailers Insurance Company - Wednesday, November 30, 2011

You’ve probably been told that as a Michigan employer you are required by law to carry workers’ compensation insurance. But do you know why, and how the system works to protect you and your employees?

Here are the basics, according to the state’s Michigan Business Guide to Workers’ Comp.

Work comp is an insurance system, mutually beneficial to both employees and their employers. It serves two basic purposes:

          
  • To provide benefits to employees who have suffered a work-related injury or illness; and
  •            
  • To protect employers from costly litigation over claims of work-related injuries and illnesses.

Michigan’s work comp program is regarded as one of the strongest in the nation. Benefits to the injured employee can include one or more of the following:

  • Appropriate medical treatment
  •            
  • Partial replacement of lost income in cases where an employee is unable to work for more than seven days (or death benefits paid to dependent survivors in the event of a fatal injury or illness); and
  •           
  • Vocational rehabilitation so the injured worker can return to gainful employment as quickly as possible.

Work comp is the oldest form of no-fault insurance. First established in Germany in 1856 and adopted soon after by England and most of Western Europe, work comp insurance was enacted in Michigan in 1912. By 1920, all but eight of the other states had passed work comp laws.

Work comp is “no fault” in the sense that benefits are paid without regard to who or what caused or contributed to an injury or illness that “arises out of, or in the course of, employment.” Before this system was established, an employer could be sued for negligence and could only defend against such lawsuits by proving that the employee was at least partially at fault, that a fellow employee contributed to the injury, or that the employee assumed the risk of potential injury by accepting the job.

That’s why we say work comp protects both you and your employees.


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