Workers’ compensation insurance laws and requirements for employers vary from state to state, but private employers can generally choose whether to carry workers' compensation insurance coverage. A workers' compensation insurance policy provides lost wages and medical benefits to employees injured on the job—and death benefits for the spouse and dependents (children) of a worker who dies in a work-related accident.

Under workers’ compensation laws in many states employers who subscribe to workers’ compensation insurance receive a significant legal protection—they cannot be sued by an injured employee (or the estate of a deceased employee) unless the employer was grossly negligent (more negligent than simple, ordinary negligence).

In other words, if an employer has workers’ compensation insurance, that is usually the exclusive remedy for an injured employee (known as the exclusive remedy provision in the statute), and the insurance coverage bars an injured employee from suing the employer (known as the workers’ compensation bar).

An employer who does not purchase or subscribe to workers’ compensation insurance is known as a nonsubscriber. Workers’ compensation laws are usually located in a state’s statutes.

In Alaska, workers' compensation insurance is mandatory for all employers, including those in the private sector, with very few exceptions. This means that employers are required to provide workers' compensation coverage for their employees. The insurance covers medical expenses, rehabilitation costs, and a portion of lost wages for employees who are injured on the job or suffer from a work-related illness. Additionally, it provides death benefits to the dependents of workers who die as a result of a job-related injury. In Alaska, the workers' compensation system is a no-fault system, which means that employees do not need to prove their employer was at fault for their injury to receive benefits. As a result of the exclusive remedy provision, employees generally cannot sue their employers for work-related injuries if the employer has the proper workers' compensation insurance in place. However, there are exceptions where an employee can sue outside of the workers' compensation system, such as in cases of gross negligence. Employers in Alaska who fail to provide workers' compensation insurance may face penalties and are exposed to the risk of being sued by injured employees.