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 Illinois, workers' compensation insurance is mandatory for most employers, with very few exceptions. The Illinois Workers' Compensation Act requires employers to provide workers' compensation insurance for almost everyone who is hired, injured, or whose employment is localized in Illinois. This insurance provides benefits for employees who are injured on the job or suffer from work-related illnesses, covering medical expenses, lost wages, and rehabilitation costs. Death benefits are also available for the dependents of workers who die as a result of their employment. Employers in Illinois who comply with the law by securing workers' compensation insurance are generally protected by the exclusive remedy provision, meaning they cannot be sued for workplace injuries or illnesses except in cases of extreme negligence. Conversely, employers who choose not to carry workers' compensation insurance (nonsubscribers) can face severe penalties, including fines, criminal charges, and civil liability for damages that could have been covered under a workers' compensation claim.