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 Massachusetts, workers' compensation insurance is mandatory for all employers, with very few exceptions. This insurance provides coverage for 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 the dependents of a worker who dies as a result of a job-related injury or illness. The Massachusetts Workers' Compensation Act (Chapter 152 of the Massachusetts General Laws) stipulates that employers must have this insurance for all employees, including part-time employees, and in most cases, it serves as the exclusive remedy for injured workers. This means that employees generally cannot sue their employers for work-related injuries if the employer has the proper workers' compensation insurance in place. However, if an employer is found to be without workers' compensation insurance, they can face severe penalties, including fines and imprisonment, and they lose the protection of the exclusive remedy provision, potentially exposing them to civil lawsuits by injured employees.