One Hundred Years of Industrial Insurance

Industrial
insurance in Washington state has just completed its centennial year and
Washington was the first state in the nation to put an industrial insurance
program in place. Although insurance itself has a history that some folks trace
back as far as the Hammurabi code, industrial insurance protecting workers has
a much shorter history. In this country, the Mine Safety Act in 1864 was the
leading edge of efforts to help workers who were injured in the line of duty.
Organized labor began asking for industrial insurance legislation in the late
1870’s and by 1902, the state of Maryland passed the first workers compensation
legislation.

According to the
Port Townsend Daily Leader, Washington became the first state to institute a
state operated program of industrial insurance, joining Norway as  “the only
locality in the world which has in active operation straight-out state
insurance against the hazards of industrial insurance” (Port Townsend Daily Leader, March 20, 1912,page 3). The Leader reported that “claims began pouring
in” as soon as the program was operational. Rates for the insurance program
whereby assessment against company payrolls and ranged from one a half percent
for lower risk industries to a high of 10% for powder mills. While the expected
claims experience was very high – up to 9% of the covered work force, the new
program was expected to cover its costs and build some reserves. In fact, the
program proceeded so well in its first year of operation that the Washington
industrial insurance commission was described as “buoyant with satisfaction” at
its performance.

The Leader noted
with approval that the program capitalized a reserve to take care of unmatured
risk. They characterized that approach as “a most important detail that mutual
and other public insurance schemes are inclined to overlook or defer.”

Industrial
insurance and Washington L&I have come a long way since 1911 and now
virtually every worker in the state is covered by this hundred-year-old
insurance program.

 

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