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 York State, workers' compensation insurance is mandatory for most employers, and they are required by law to have workers' compensation coverage for all employees. The New York Workers' Compensation Law (WCL) provides for compensation for lost wages, medical treatment for injuries sustained on the job, and death benefits to the dependents of a worker who dies as a result of a work-related injury. This insurance serves as the exclusive remedy for employees injured in the course of employment, meaning that they generally cannot sue their employer for work-related injuries if the employer has the proper workers' compensation insurance in place. This is known as the 'exclusive remedy' provision. Employers who fail to provide workers' compensation insurance are considered nonsubscribers and can face severe penalties, including fines and criminal charges. Additionally, they lose the protection of the exclusive remedy provision and may be exposed to civil lawsuits by injured employees.