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 Alabama, workers' compensation insurance is mandatory for most employers. State law requires that any business with five or more employees, whether full-time or part-time, must provide workers' compensation insurance. This insurance covers medical expenses, lost wages, and rehabilitation costs for employees who are injured on the job, as well as death benefits for dependents of workers who die as a result of a work-related injury. Employers in Alabama who comply with the workers' compensation requirements are generally protected by the exclusive remedy provision, meaning that they cannot be sued for workplace injuries or deaths except in cases of gross negligence. However, if an employer unlawfully fails to have workers' compensation insurance, they can be considered a nonsubscriber and may lose the legal protections provided by the workers' compensation system, exposing them to potential lawsuits by injured employees.