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 Kentucky, workers' compensation insurance is mandatory for all employers who have one or more employees, whether full-time or part-time. This insurance provides benefits to employees who suffer work-related injuries or illnesses, including coverage for medical expenses, lost wages, and death benefits for dependents in the case of a fatal workplace accident. Kentucky law establishes a 'no-fault' system, meaning that employees are generally entitled to receive benefits regardless of who was at fault for the injury. As a result of this system, the workers' compensation insurance serves as the exclusive remedy for injured employees, which means that they typically cannot sue their employer for work-related injuries if the employer has the proper workers' compensation coverage in place. However, there are exceptions to this rule, such as cases involving intentional acts by the employer that cause harm. Employers in Kentucky who fail to carry workers' compensation insurance may face penalties and are exposed to the risk of being sued by employees for workplace injuries.