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 Hawaii, workers' compensation insurance is mandatory for all employers, including part-time employees and family members employed by the company. This requirement is outlined in the Hawaii Workers' Compensation Law (HRS Chapter 386). The law ensures that employees who suffer work-related injuries or illnesses receive medical care and wage replacement benefits. Additionally, it provides death benefits to dependents of workers who die as a result of work-related incidents. Employers in Hawaii are protected by the exclusive remedy provision, which generally limits the ability of employees to sue their employers for work-related injuries if the employer has workers' compensation insurance. However, in cases of gross negligence, an employer may still be subject to legal action. Noncompliance with the requirement to carry workers' compensation insurance can result in penalties, fines, and potential criminal charges for the employer.