Workers’ Compensation Insurance

Workers’ compensation insurance provides benefits to employees who become ill or injured on the job and offers employers some protection from injured employees’ lawsuits. The premiums are paid by the employer.


Workers’ compensation programs are administered at the state level and the requirements vary. Some states require insurance when you hire your first employee and some exempt certain agricultural and construction businesses.

Some states don’t require coverage for certain kinds of workers. Independent contractors, domestic home workers, volunteers, and seasonal workers are generally not required to be covered by workers’ compensation. And business owners generally can choose to be exempt from coverage.


Generally, any work-related injury or illness qualifies for workers’ compensation benefits. The injury can be sudden, like a fall, or can be long-term, like carpal tunnel or lung diseases from working in coal mines or around asbestos.


Rates and premiums are set by the state and consider the employer’s type of business and the employee’s job classification. For example, trucking companies usually have higher premiums than an attorney’s office. Also, the volume and dollar amount of an employer’s past claims will usually increase premiums.


Employers are required to post notices that inform employees of their rights and benefits that are available. And if an employee incurs an injury, the employer must provide a claim form promptly.