What is Workers’ compensation Insurance?

Workers’ compensation insurance, often referred to as workers’ comp, is a foundational type of business insurance. Specifically, it covers medical expenses and lost wages for employees who are injured on the job or become ill due to a work-related cause. It operates as a no-fault system, meaning that an injured employee can receive benefits regardless of who caused the incident. In exchange for these guaranteed benefits, employees typically give up their right to sue for negligence. This policy protects both the employee by providing reliable support and the employer by shielding them from costly lawsuits. Because of its comprehensive protection, it is often paired with general liability insurance to protect a business from all angles. Ultimately, maintaining this coverage is mandatory for any business with three or more employees.