Workers ‘compensation insurance covers you for an employee’s on-the-job injuries, it provides wage replacement and medical benefits to employees who are injured on-the-job.
Businesses with employees are required by various state laws to carry some type of workers’ compensation insurance. Cost of the coverage is based on type of work performed and annual salary.
In most cases, laws prohibit the employee from bringing a negligence lawsuit against an employer for work-related injuries when workers’ compensation insurance is in effect.
Information from FindLaw.com See more at: http://smallbusiness.findlaw.com/liability-and-insurance/different-types-of-commercial-insurance.html#sthash.xPi8yqSb.dpuf