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 Arkansas, workers' compensation insurance is mandatory for most employers. The Arkansas Workers' Compensation Law requires all employers with three or more employees to obtain workers' compensation insurance to cover medical expenses, lost wages, and rehabilitation costs for employees who are injured on the job or suffer from a work-related illness. Additionally, it provides death benefits to dependents of workers who die as a result of job-related injuries. This insurance serves as the exclusive remedy for injured employees, meaning that employees generally cannot sue their employers for work-related injuries if the employer has the proper workers' compensation coverage. However, there are exceptions where an employee might be able to sue outside of the workers' compensation system, such as in cases of intentional acts or gross negligence by the employer. Employers who fail to carry workers' compensation insurance when required can face severe penalties, including fines and possible criminal charges.