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What Is Workers’ Compensation Insurance?

Workers’ compensation can pay medical care and part of an employee’s lost wages after a work-related injury or illness. If you have staff, check who is covered in each state; owners, contractors and some workers may be treated differently.

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What Does Workers’ Compensation Insurance Cover?

An employee injured while doing assigned work may need medical care and time away from work; benefits and eligibility depend on the state and job. 1,3

Workers’ compensation can pay medical care, rehabilitation and lost wages for employees’ work-related injuries or illnesses. 1,2,3

Work-Related Injury Benefits

Ask how your quote addresses medical care, wage replacement, disability benefits and death benefits. 1,3

Exclusive Remedy and Exceptions

Workers’ compensation generally provides benefits without requiring an employee to prove employer fault and limits the employee’s ability to sue; state rules and exceptions apply. 1,3,2,4

Who Needs Workers’ Compensation Insurance?

Check workers' compensation requirements wherever you have employees. Your states, payroll and job duties all belong in the application. 2,3,4,6

Workers’ Compensation Insurance Coverage Examples

What happened

An Employee Is Injured in the Warehouse

An employee is hurt while working in your warehouse and needs treatment and time off.

How coverage may help

Workers' compensation addresses medical care and wage replacement for work-related injuries, with benefits determined by the applicable state's rules. 1,2,3,4

What happened

You Hire in Another State

Your company hires its first employee in a new state.

How coverage may help

That state's requirements and insurance options may differ from your existing arrangements. Payroll and job classifications also need to reflect the new employee's work. 1,2,3,4,6

What Do Different States Require?

State-by-State Requirements

List each state where you have employees and ask what coverage it requires; workers’ compensation rules differ by state. 1,4,3,2

Texas Choice for Most Private Employers

In Texas, most private employers can choose whether to carry workers’ compensation; ask how that choice affects your employees’ benefits and your lawsuit exposure. 4,1

California Requirement and Self-Insurance

California requires employers to provide workers’ compensation coverage through insurance or qualifying self-insurance; benefits include medical care, disability, job displacement and death benefits. 3,5

Buying insurance and qualifying for self-insurance are different processes; confirm which option your business can use. 3,5

How Do You Compare Workers’ Compensation Insurance Coverage and Costs?

Classification and Payroll

Separate payroll by the work employees do and the states where they work. A business with warehouse staff and an office team should have the broker explain the classifications for both. The classification and payroll figures are part of how the premium is calculated. 2,6

Payroll to showQuestion for the quote
Warehouse or other physical workHow is that work classified?
Office or other lower-hazard workIs it classed separately from the physical work?
Total payroll by stateWhich states are in the quote?
2,6

Insurance Options in Each State

Ask which workers’ compensation options are available in each state where you operate, including private insurers or state funds. 1

How Does Workers’ Compensation Insurance Compare With Related Coverage?

Workplace Injury Versus Other Injuries

Keep workers’ compensation separate from general liability for injuries to nonemployees and employee health benefits for non-work medical care. 2,1
ConcernPlace in the discussion
An employee’s work-related injury or illnessWorkers’ compensation
Injury to a visitor or other person who is not an employeeGeneral liability
Non-work medical care for employeesEmployee health benefits
2,1 1,2,3

What Do You Need for Workers’ Compensation Insurance Quotes?

Prepare your operating states, payroll by work type, employee and contractor roles, prior claims and existing coverage. 2,3,4,6

States, Payroll and Working Relationships

PrepareAsk the broker
States of operationWhat does each state require, and which insurers or state funds are available?
Payroll by work typeHow will each job classification affect your premium?
Employee and contractor rolesWho qualifies as a covered employee, including part-time staff, interns and contractors?
Prior claimsWhich claim records does the insurer need?
Existing coverageHow does a replacement quote compare, including state-specific options?
2,3,4,6 2,6 3,5

Workers’ Compensation Insurance: Key Terms in Plain English

Wage Replacement

Benefits addressing lost wages from a work-related injury or illness, under the applicable rules. 1,2,3 1,3

Work Classification

How an employee's work is categorized for the quote, considered alongside payroll when discussing premium. 2,6

Frequently Asked Questions About Workers’ Compensation Insurance

Are Workers’ Compensation Rules the Same Nationwide?

No. Requirements and insurance options differ by state. Check every state where you have employees. 1,4,3,2

Is Workers’ Compensation the Same as Health Insurance?

No. Workers' compensation concerns work-related injuries and illnesses. Employee health benefits address non-work medical care. 2,1

Do Contractors and Part-Time Staff Count for Workers’ Compensation?

Check who qualifies as a covered employee under the rules in each operating state. Identify contractors, part-time staff and other workers when preparing the quote instead of assuming their job label determines coverage. 2,3,4,6 1,4,3,2

How Do Payroll and Job Duties Affect Workers’ Compensation Quotes?

Insurers use payroll and the type of work when discussing premiums. Compare how each quote classifies the work and which payroll figures it uses so you can understand differences between proposals. 2,6

Is Workers’ Comp Required?

Most states require workers’ comp for most employers, but thresholds, exemptions, and alternatives depend on state law.

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Does Workers’ Comp Cover Car Accidents?

A car crash may qualify for workers’ comp when the employee was acting for work; ordinary commuting and personal trips may be treated differently.

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Does Workers’ Comp Cover Contractors?

Workers’ comp may cover a contractor classified as your employee under state law; an independent contractor with separate coverage is a different case.

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Does Workers’ Comp Cover Mental Health Conditions?

Workers’ comp may cover a mental-health condition linked to work, but state law and medical evidence determine eligibility.

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Does Workers’ Comp Cover Occupational Disease?

Workers’ comp can cover occupational disease tied to work under state law, but each state sets its own definition and proof rules.

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Does Workers’ Comp Cover Owners?

Workers’ comp covers an owner only when state law and the policy include them, often through an election or endorsement.

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Does Workers’ Comp Cover Remote Workers?

A remote worker’s injury may qualify if it is work-related under state law and the employee is covered in that state.

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Does Workers’ Comp Cover Repetitive-Stress Injuries?

Workers’ comp may cover cumulative injuries from repeated work motions, subject to medical evidence and state causation rules.

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View all 21 questions

What Coverage Is Related to Workers’ Compensation Insurance?

  • What Is General Liability Insurance?

    General liability can protect your business when a customer or visitor claims you caused injury or damaged their property. It suits businesses serving customers or working on their premises; your own building, tools and stock need property coverage.

  • What Are Employee Health Benefits?

    Employer health benefits give eligible staff access to medical care through a group plan or another employer arrangement. When setting a budget or renewing, compare eligibility, provider networks, employee contributions and total cost.

Workers’ Compensation Insurance Guides by State

Which Insurance Providers Offer Workers’ Compensation Insurance?

  • AIG

    AIG Workers’ Compensation options by distinct channel

  • Alliance Risk

    Alliance Risk arranges workers’ compensation insurance.

  • Amelia Risk

    Amelia Risk arranges workers’ compensation insurance.

  • Aon

    Aon lists workers compensation among global construction coverage areas; this does not establish state availability or a placement.

  • biBerk

  • Chubb

    Chubb offers workers’ compensation insurance for small businesses, from one employee up to $30 million in revenue, including technology companies.

  • CNA

  • Corgi

    Corgi lists workers’ compensation insurance.

  • Coverdash

    Coverdash lists workers’ compensation insurance.

  • Embroker

    Embroker arranges workers’ compensation insurance.

  • ERGO NEXT Insurance

    ERGO NEXT offers workers’ compensation insurance for small businesses.

  • Founder Shield

    Founder Shield lists workers’ compensation insurance.

  • Foxquilt

    Workers’ compensation page; state requirements vary.

  • Gallagher

    Gallagher arranges workers’ compensation insurance for small businesses.

  • Harper

    Harper arranges workers’ compensation insurance.

  • Heffernan Insurance Brokers

    Heffernan arranges workers’ compensation insurance.

  • Hiscox

    Hiscox provides access to workers’ compensation underwritten by Hartford Fire Insurance Company and requires a general liability policy.

  • HUB International

    HUB International arranges workers’ compensation insurance.

  • Insureon

    Insureon markets Workers’ Compensation; description does not establish insurer, policy terms, or individual availability.

  • Kinro

    Kinro arranges workers’ compensation insurance and reviews state, payroll and class-code questions.

  • Liberty Mutual

    A group brand spanning personal and commercial insurance businesses; its business unit pages describe small-commercial cover for small businesses and commercial, specialty, surety, and reinsurance solutions for mid-size and large businesses.

  • Lockton

    Lockton arranges workers’ compensation insurance.

  • Markel Insurance

    Markel Workers Compensation

  • Marsh

    Marsh McLennan Agency (MMA), a Marsh business, arranges workers’ compensation insurance.

  • Marsh McLennan Agency

    Business insurance and employee health and benefits, with retirement, wealth, and private-client services also listed for the United States and Canada.

  • Mylo

    Mylo compares workers’ compensation options from insurers.

  • Nationwide

    Nationwide markets workers’ compensation and describes state-variable benefits and services. State law, policy, and employer eligibility govern.

  • Newfront

    Newfront arranges workers’ compensation insurance through its casualty practice.

  • Pie Insurance

    Pie Insurance offers workers’ compensation insurance for small businesses.

  • Risklytics

    Risklytics arranges workers’ compensation insurance for robotics, hardware and AI businesses.

  • Simply Business

    Small businesses and solopreneurs seeking commercial insurance, as described by Simply Business.

  • StartupInsurance.ai

    StartupInsurance.ai arranges workers’ compensation insurance for startups.

  • TechInsurance

    TechInsurance arranges workers’ compensation insurance for small businesses.

  • The Baldwin Group

    Listed for named commercial sectors; Baldwin’s dedicated page describes workers’ compensation program and services.

  • The Hartford

    The Hartford offers workers’ compensation insurance.

  • THREE by Berkshire Hathaway

    Marketed within THREE’s combined commercial policy; the quote and issued form determine the protection.

  • Travelers

    Travelers offers workers’ compensation insurance.

  • USI Insurance Services

    USI arranges workers’ compensation insurance.

  • Vouch

    Vouch lists workers’ compensation among core coverages for technology companies.

  • WithCoverage

    WithCoverage arranges workers’ compensation insurance, for example for construction and restaurant businesses.

  • Zurich U.S.

    Zurich markets workers’ compensation insurance.

Updated .

Spot, a product of Tools for Enlightenment, publishes this research and works in the commercial insurance market. Editorial policy. To suggest a correction, contact Spot with the page URL and supporting source.

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