Answer to Question 1
Workers' compensation is a costly concept. From the outset, one of the basic principles has been cost allocation. Cost allocation is the process of spreading the cost of workers' compensation across an industry so that no individual company is overly burdened. The cost of workers' compensation includes the cost of premiums, benefits, and administration. These costs have risen steadily over the years.
Answer to Question 2
In recording and reporting occupational illnesses and injuries, it is important to have common definitions. The Department of Labor uses the following definitions for record-keeping and reporting processes:
An occupational injury is any injury such as a cut, fracture, sprain, or amputation that results from a work-related accident or from exposure involving a single incident in the work environment. An occupational illness is any abnormal condition or disorder other than one resulting from an occupational injury caused by exposure to environmental factors associated with employment. Included are acute and chronic illnesses or diseases which may be caused by inhalation, absorption, ingestion, or direct contact with toxic substances or harmful agents.
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