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 Wisconsin, workers' compensation insurance is mandatory for most employers. Wisconsin law requires that any employer with three or more full-time or part-time employees must obtain workers' compensation insurance or become self-insured. Even employers with one or more employees who are paid $500 or more in any quarter of a calendar year must have insurance. This insurance provides benefits for employees who are injured on the job or develop work-related illnesses, covering medical expenses and lost wages. The law also provides death benefits to dependents of workers who die due to work-related causes. In Wisconsin, the workers' compensation system is intended to be the exclusive remedy for injured employees, which means that in most cases, employees cannot sue their employers for work-related injuries if the employer has the proper workers' compensation insurance. This is known as the exclusive remedy provision. However, there are exceptions where an employee can sue outside of the workers' compensation system, such as in cases of intentional harm by the employer. Employers who fail to carry workers' compensation insurance when required can face severe penalties, including fines and imprisonment, and may be subject to lawsuits by injured employees.