Employers have a legal responsibility to their employees to make the workplace safe. However, accidents happen even when every reasonable safety measure has been taken.

Workers compensation laws were created to ensure that employees who are injured on the job are provided with fixed monetary awards. This eliminates the need for litigation and creates an easier process for the employee. It also helps control the financial risks for employers since many states limit the amount an injured employee can recover from an employer.

Workers Compensation Insurance is designed to help companies pay these benefits. As a protection for employees, most states require that employers carry some form of Workers Compensation Insurance. Workers Compensation Insurance is not health insurance. Workers Compensation is designed specifically for injuries sustained on the job.

In most states, if you have employees, you are required to carry Workers Compensation coverage. Even in non-mandatory states, it can be a very good idea, particularly if you have many employees, or if they are engaged in hazardous activities.

Workers compensation provides payments to injured workers, without regard to who was at fault in the accident, for time lost from work and for medical and rehabilitation services. It also provides death benefits to surviving spouses and dependents.


Workers compensation insurance must be bought as a separate policy. Although in-home business and business owners policies (BOPs) are sold as package policies, they don't include coverage for workers' injuries.