Workers’ compensation insurance provides medical and wage benefits to people who are injured or become ill at work. The coverage is mandated by the state and the wage and medical benefits vary. Workers’ compensation is considered a social insurance because it relies on a social contract between management and labor, wherein exchange for purchasing workers’ compensation insurance, business owners are protected from civil suits from their workers who become injured on the job. Yet each party’s benefits have limitations. Workers’ compensation insurance is purchased by businesses, and is underwritten by insurance companies.

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Workers’ compensation provides indemnification for medical expenses, lost wages, and rehabilitation costs to employees who are injured or become ill “in the course and scope” of their job. It also covers the risk of death and provides indemnification to families of employees who are killed on the job.