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 New Jersey, workers' compensation insurance is mandatory for all employers who are not covered by federal programs, regardless of the number of employees, hours worked, or the type of employment. This insurance provides medical treatment, wage replacement, and permanent disability compensation to employees who suffer job-related injuries or illnesses, and death benefits to dependents of workers who have died as a result of their employment. New Jersey's workers' compensation system operates under a 'no-fault' basis, meaning that employees are not required to prove fault for their injury or illness to receive benefits. The exclusive remedy provision applies, which means that for most job-related injuries, an employee's ability to sue their employer is limited. However, if an employer intentionally causes harm, or if the employer fails to provide workers' compensation insurance as required by law, an employee may have the right to sue for damages in court. Employers who fail to provide workers' compensation coverage can face severe penalties, including fines and criminal charges.