Many landscapers view insurance as a ‘necessary evil’ and do not understand the advantages they receive when purchasing a required insurance policy such as workers’ compensation. Workers’ compensation is a great example because it is mandated by state governments, and landscaping businesses with employees are required by law to provide the benefits listed in their state statutes for injuries in the workplace. To see the significance of this coverage, please take a stroll with me back into history.

Textile Factory Workers

After the American Civil War ended in 1865, the Industrial Revolution made its way from Europe to the United States. Factories were built and many new industries emerged as others made technological improvements. The garment industry in New York and the surrounding areas brought attention to the plight of the injured worker. The conditions were particularly tough and the industry demanded high production. Through the turn of the century, the legal profession in the United States was also growing and the injured workers gained the right to sue the employer.

The judicial systems became backlogged with all of the cases, preventing judges from dealing with other suits and making the entire system inefficient. In the midst of this chaos, the injured workers began to prevail in the rulings and employers lost machinery, buildings, and other property. By 1908, the workers were winning in nearly 15% of all cases and common law developed the concept that industry is responsible for the costs of injuries inherent in industrial occupations.

Theodore Roosevelt

At the urging of President Theodore Roosevelt, the first “workmen’s” compensation law was passed by Congress to cover certain employees of the Federal Government. Amidst the lawsuits, employers began lobbying with state legislatures to pass similar laws, and in 1911, ten states enacted the controversial law. It was clear that the growing success of litigation was felt by the business community.

The business owners requested that the workers’ compensation laws included what is known as the “great trade-off”. The employer would agree to provide medical benefits and some wage replacement benefits to the injured workers if they would waive their right to sue the employer. Many states passed the laws in order to attract businesses, especially those in the manufacturing industry. By 1949, all the states had at least some form of workers’ compensation insurance in effect.

Today, workers’ compensation has become the exclusive remedy for the injured worker, regardless of fault in the injury. It protects employers from damage suits filed by injured workers and also provides employers with a basis for calculating production costs. It is still administered on a state-by-state basis and landscaping business must abide by the requirements within the states that they operate. As you pay your next premium bill for workers’ compensation insurance, I urge you to keep in mind how this form of insurance developed and the concept of the “great trade-off”.

The Agent Articles section of BearWiseLandscapers.com allows our insurance agents to provide practical information for landscapers. These agents can also obtain quotes and establish a custom insurance program for your landscaping business through our access to a variety of insurance carriers. This agent article is filed under 4 Workers' Compensation, and you can follow comments to it through the RSS 2.0 feed. Feel free to leave your own response below: