Workers' compensation is one of the few business coverages that is usually not a choice. In most states, the moment a business has employees, it is legally required to carry workers' comp, and for good reason: it handles the cost of on-the-job injuries in a way that protects both the worker and the employer.
Workers' compensation pays for employees' medical treatment and a portion of lost wages when they are injured or become ill because of their job, along with benefits for disability or, in the worst cases, death. It applies regardless of who was at fault, which is the grand bargain at its center: workers get reliable coverage without having to prove the employer was negligent.
In exchange for that reliable, no-fault coverage, workers' comp generally limits an employee's ability to sue the employer over a workplace injury. So the coverage protects the business as much as the worker: it caps and channels a liability that could otherwise be open-ended. Going without it, where required, exposes the business to fines and to exactly the lawsuits the system is meant to prevent.
Premiums depend on payroll, the classification of the work, and the business's claims history, reflected in an experience rating. Safer workplaces with fewer claims pay less over time, which makes workplace safety a direct financial lever, not just a moral one.
Required, and protective both ways.
This is general information, not personalized insurance advice. Coverage terms, definitions, and availability vary by policy and provider.