Definition of second-injury fund

insurance fund set up by most states to encourage employers to hire handicapped workers. Where workers with existing handicaps suffer further work-related injuries or diseases that result in total disability, the employer is responsible for the workers compensation benefit only for the second injury or disease. The fund makes up the difference between the benefit for total disability and the benefit for the second injury. Second-injury funds are financed through general state revenues or assessments on workers compensation insurers.