Workers' compensation is an insurance program which provides benefits for workers who are injured while working for a private or government employer. These benefits include replacement money for lost wages and medical benefits in the case of an injury. The workers' compensation system generally, with a few notable exceptions, works by removing the burden of a lawsuit by employees to receive benefits. In exchange, the system reduces the liability for employers if a worker gets injured, by preventing injured employees from suing. Employers are generally required to subscribe to a workers' compensation insurance program, for the purpose of covering all of their employees. This system is designed to achieve a balance of power between injured workers and their employers.

The workers' compensation system is managed by individual states, and the Federal government, which has its own programs for Federal employees. Workers' compensation replaces older legal systems where workers faced significant difficulties in proving negligence by their employer. While workers could get large monetary judgments in their favor if they won, the problem was that they rarely won. In contrast, under workers' compensation laws, the employer is held strictly liable for workers' injuries in most states. Strict liability dictates that the employer does not need to be at fault in order for the employee to receive compensation, and the employer cannot avail themselves of an attorney to defend themselves. At the same time, under the modern workers' compensation system, the injured employee cannot sue for punitive damages. In addition, most states forbid the termination of a worker's employment in retaliation for filing a workers' compensation claim. Employers pay higher workers' compensation insurance premiums for employees who do more dangerous types of work, or if injuries that occur at their individual workplace are prodigious or highly expensive.

There are exceptions to the rule when it comes to workers' compensation laws. For instance Texas allows employers to opt out of the system altogether, thus exposing them to potentially unlimited liabilities if they are sued by an injured worker. Other states, like California, allow certain employers to self-insure, which means to officially cover their potential workers' compensation liabilities with their own money. Most states defer to private insurance carriers to provide workers' compensation insurance, while a minority of states have their own government-managed funds. Government-managed funds primarily serve to provide last-resort coverage for types of work that private companies won't cover. This typically pertains to highly dangerous occupations such as roofing and farm work. It is also possible in some cases for workers' compensation insurance providers to deny a workers' compensation claim. In this case it will be necessary for the injured employee to seek legal representation through an attorney that specializes in workers' compensation.

The system of workers' compensation is beneficial for both workers and employers alike. In a given year over four million injuries occur at the workplace, which means employers are spared the cost of defending themselves from roughly that many potential lawsuits and paying out potentially ruinous legal judgments. In addition, the cost of insurance serves as an incentive to employers to maintain a safe workplace. In turn, injured employees can receive benefits without having to go to court, even if the employer goes out of business.

To learn more about workers' Compensation, please read the following links.

Worker's Compensation & Work Safety

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