Before WorkCover: The 4,000-Year History of Paying for Harm

From clay tablets to case law and why the master–servant mindset still shapes recovery after a workplace injury today.

We think workers’ compensation began with modern industry. It didn’t.

The idea that a worker deserves compensation for harm is as old as civilization itself.

Ancient beginnings — price lists for injury

Long before factories and insurers, ancient lawmakers set literal prices on human damage. The Code of Hammurabi (c. 1750 BCE) laid out fixed payments for the loss of a hand, eye, or limb. If a worker lost a finger, the law dictated the number of silver shekels owed.

Crude, yes—but it marked the first recorded moment when society acknowledged:injury at work creates an obligation to repair.

In ancient Greece and Rome, compensation was tied not to fairness but to ownership. If a slave was injured, the master who viewed the worker as property might receive payment. It was protection of capital, not compassion, but it introduced the idea that injury had measurable value.

From the trade in bodies to the brotherhood of labour

Before governments insured workers, insurers protected 'slave' owners.

In the 17th and 18th centuries, Lloyd’s of London and other British underwriters routinely insured ships engaged in the transatlantic slave trade.The “cargo” wasn’t goods, it was human lives.

When enslaved people died, the owners not the families received compensation. The Zong Massacre (1781) made this grotesque logic visible: 130 enslaved Africans were thrown overboard so the ship’s owners could claim insurance for “lost cargo.” The British court treated it not as murder, but as a property dispute.

Those early ledgers at Lloyd’s (for which the institution formally apologised in 2020) reveal a brutal truth:the insurance industry was built on pricing human life. That same logic valuing labour in monetary terms would later underpin both life insurance and workers’ compensation.

Yet in the shadow of that trade, a different idea began to rise.

Across medieval Europe, craft guilds built early forms of mutual aid.Carpenters, stonemasons, and weavers pooled their earnings to protect one another from misfortune. If a craftsman was injured, the guild provided income and care.If he died, his family received support.

It was the opposite of the slave ledger, a humanising correction to a dehumanising economy.

These guild funds were the ancestors of modern unions, cooperatives, and ultimately, workers’ compensation itself. They proved that risk could be shared without exploitation and that solidarity, not servitude, was the true foundation of social insurance.

The industrial shock and the “unholy trinity”

The Industrial Revolution multiplied both production and peril. Steam engines, spinning machines, and open shafts created new kinds of injury. Yet the courts protected employers through the “unholy trinity” of defences:

1️⃣ Contributory negligence — you caused your own accident.

2️⃣ Assumption of risk — you knew the danger when you took the job.

3️⃣ Fellow-servant rule — blame your co-worker, not the boss.

Under this logic, almost no worker could win a case. Justice was unaffordable; compensation, unreachable.

Bismarck’s breakthrough, the birth of no-fault

In 1884, German Chancellor Otto von Bismarck introduced the world’s first no-fault accident insurance. Workers gave up the right to sue; employers funded a national insurance pool.In return, the State guaranteed prompt, predictable compensation and medical care.It was the first true social insurance system and the template for all that followed.

Britain and the domino effect

Britain’s Workmen’s Compensation Act (1897) adopted the same principle. Within decades, most of Europe followed. In the United States, Wisconsin led in 1911; Mississippi was last in 1948. By mid-century, the “grand bargain” was global:workers surrendered the right to sue in exchange for statutory protection after injury.

Australia’s early steps and who was missing

Australia introduced state-based workers’ compensation laws in the early 1900s, modelled on Britain’s reforms. These laws covered mainly industrial male workers and excluded most women, migrants, and casual labourers. It wasn’t until the 1970s that coverage began to reflect the real diversity of the workforce.

It was Gough Whitlam who recognised how archaic and unjust the state-by-state patchwork had become.His government’s National Compensation Bill 1974 proposed something Australia had never seen: a single, universal system covering all injuries and illnesses — at work, on the road, or at home. It was no-fault, federally funded, and designed to replace both litigation and the patchwork of state schemes with a focus on rehabilitation over blame.

It was, in every sense, revolutionary. But it never survived the politics. The states refused to surrender control, insurers fought to preserve their market, and the Commonwealth Treasury balked at the cost, warning of an open-ended fiscal liability.When Whitlam was dismissed in 1975, the dream of a national compensation scheme died with him.

The hidden evolution — mental injury and the invisible wound

While the earliest laws priced limbs, modern systems now try to price trauma. Yet psychological injury still sits uneasily inside frameworks designed for physical harm.

Safe Work Australia defines psychological injury as a compensable condition but only if work is a “significant contributing factor.” Claims for mental-health conditions have risen more than 50 per cent since 2000, and they now represent the most expensive and longest-lasting type of claim. (Black Dog Institute, 2021)

The Royal Australian and New Zealand College of Psychiatrists warns that claimants with mental injuries face systemic disadvantage: delays, disbelief, and stigma baked into insurance processes.(RANZCP, 2021)

Legacy of diagnostics, gender, and the “hysteria” hangover

The same system that once valued injured bodies still mistrusts injured minds. Insurance and medical assessments rely on dated psychiatric rating scales that categorise human suffering into rigid numerical “impairments.”

Many of these frameworks were built on 19th-century medicine, when women’s emotional distress was dismissed as hysteria literally, a disorder of the womb. That legacy lingers in how female claimants, carers, and trauma survivors are still judged: emotional, unreliable, or “non-compliant.”

As the Phoenix Australia review found, the compensation process itself can worsen mental health. A system built for broken backs is now trying to fix broken minds with the same bureaucratic tools, and the same disbelief.

The master–servant shadow

Beneath every reform lies an old silhouette: the master–servant relationship. Nineteenth-century employment law defined the worker as a “servant” bound by obedience and duty. Modern legislation no longer uses those words, but the mindset endures.

Scheme agents decide who is credible. Doctors act as gatekeepers. Insurers hold the purse. And the injured, the supposed beneficiaries remain positioned as dependents seeking permission.

That is the culture of workers’ compensation today: a system that regulates loyalty rather than delivers recovery. It is long overdue for sunlight.

Why this history still matters

From Hammurabi’s clay tablets to today’s AI Claims Management, we’ve spent 4,000 years refining how to price human harm. But the question hasn’t changed: Who holds the power to define what “injury” means and who deserves to be made whole?

Half a century after Whitlam’s attempt at reform, Australia still runs a 19th-century system and wonders why it keeps breaking people instead of healing them. Recovery doesn't seem to be an option for those who find themselves lost in these schemes.

Key Sources

• Guyton, A. C. (1999). “A Brief History of Workers’ Compensation.” J. Occup. & Environ. Med.

• The Code of Hammurabi, trans. C. H. W. Johns (Project Gutenberg)

• Gregson v Gilbert (1783) – The Zong Case

• Lloyd’s of London – Statement on Historic Ties to Slavery (2020)

• Safe Work Australia – Psychological Health and Safety in the Workplace (2024)

• Black Dog Institute (2021) – Modern Work and Mental Health Section 3

• RANZCP (2021) – Public Insurance Schemes & Mental Injury Statement

• Phoenix Australia (2018) – Compensation System Review Final Report

• Safe Work Australia – “Evolution of Workers’ Compensation in Australia”