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How did Germany pioneer sickness insurance and workers’ compensation?

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The Code of Hammurabi diorite stela, with carved figures at the top showing Hammurabi seated with cuneiform inscriptions below. — Labour law Diorite stela inscribed with the Code of Hammurabi, 18th century bce.

In the 1880s, imperial Germany became the first country to establish a comprehensive system of social insurance, pioneering sickness and accident coverage to address workers' needs while simultaneously attempting to curb the rising influence of socialism.12

Chancellor Otto von Bismarck spearheaded this social policy as a strategic alternative to radical political movements. The development of these programs drew upon historical precedents, including guild-based relief funds, Prussian mandates requiring masters to provide medical care for servants, and earlier insurance schemes for miners.342

Key legislative milestones included:

Sickness Insurance (1883): This act provided employees in specific industries with medical care and cash benefits during illness, financed through joint contributions from both employers and employees.23
Accident Insurance (1884): This legislation made accident insurance compulsory, shifting the burden from the difficult-to-prove liability of employer negligence toward a system of guaranteed benefits for work-related injuries.253

These initiatives established a model for modern workers’ compensation, which relies on the principle that employers should bear the costs of occupational injuries to incentivize safer working conditions.5