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 South Carolina, workers' compensation insurance is mandatory for most employers. The South Carolina Workers' Compensation Act requires employers with four or more employees to carry workers' compensation insurance to cover medical expenses, lost wages, and rehabilitation costs for employees who suffer work-related injuries or illnesses. This insurance also provides death benefits to dependents of workers who die as a result of job-related injuries. Employers who are covered by the Act are generally protected from being sued by employees for work-related injuries, as the workers' compensation system is intended to be the exclusive remedy. This means that employees typically cannot file a personal injury lawsuit against their employer but must instead file a claim through the workers' compensation system. However, if an employer unlawfully fails to have workers' compensation insurance, they may lose this protection and could be subject to lawsuits by injured employees. Additionally, there are penalties for noncompliance, including fines and potential criminal charges.