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 Washington State, workers' compensation insurance is mandatory for most employers and is provided through the state-run system, the Washington State Department of Labor & Industries (L&I). Employers must provide this insurance for their employees, and in return, they are generally protected from being sued by employees for workplace injuries or illnesses under the exclusive remedy provision. This means that workers' compensation benefits are typically the sole remedy for injured workers, and they cannot file a lawsuit against their employer for damages related to the injury, except in cases of intentional harm. However, there are some exceptions to this requirement, such as for certain types of businesses or workers. Employers who fail to provide mandatory workers' compensation coverage can face severe penalties, including fines and being held liable for the costs of injuries that occur to their employees.