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 Vermont, workers' compensation insurance is mandatory for all employers who have one or more employees working in the state. This requirement is in place to ensure that employees who are injured or become ill as a result of their job receive medical benefits and compensation for lost wages. The Vermont Workers' Compensation Act provides these protections and also includes death benefits for the dependents of workers who die due to work-related injuries or illnesses. Employers in Vermont are protected by the exclusive remedy provision, meaning that in most cases, employees cannot sue their employers for work-related injuries if the employer has workers' compensation insurance. Instead, the workers' compensation system is the sole remedy for recovering damages. However, if an employer intentionally causes harm or is found to be grossly negligent, they may still face legal action beyond the workers' compensation system. Employers who fail to carry workers' compensation insurance (nonsubscribers) are subject to penalties and are not protected by the exclusive remedy provision, leaving them vulnerable to lawsuits by injured employees.