Workers’ compensation insurance laws and requirements for employers vary from state to state, but private employers can generally choose whether to carry workers' compensation insurance coverage. A workers' compensation insurance policy provides lost wages and medical benefits to employees injured on the job—and death benefits for the spouse and dependents (children) of a worker who dies in a work-related accident.

Under workers’ compensation laws in many states employers who subscribe to workers’ compensation insurance receive a significant legal protection—they cannot be sued by an injured employee (or the estate of a deceased employee) unless the employer was grossly negligent (more negligent than simple, ordinary negligence).

In other words, if an employer has workers’ compensation insurance, that is usually the exclusive remedy for an injured employee (known as the exclusive remedy provision in the statute), and the insurance coverage bars an injured employee from suing the employer (known as the workers’ compensation bar).

An employer who does not purchase or subscribe to workers’ compensation insurance is known as a nonsubscriber. Workers’ compensation laws are usually located in a state’s statutes.

In Michigan, workers' compensation insurance is mandatory for most employers. The Michigan Workers' Disability Compensation Act requires that all private employers who regularly employ one or more employees 35 hours or more per week for 13 weeks or longer during the preceding 52 weeks must provide workers' compensation insurance. This insurance covers medical expenses, lost wages, and rehabilitation costs for employees who are injured on the job or suffer a work-related illness. Additionally, it provides death benefits to dependents of workers who have died due to a job-related injury or illness. Employers in Michigan who comply with the law by purchasing workers' compensation insurance are generally protected by the exclusive remedy provision, meaning they cannot be sued for workplace injuries or deaths except in cases of intentional acts. Noncompliance can result in severe penalties, including fines and being charged with a misdemeanor or felony. It's important for employers to understand their obligations under Michigan law to avoid legal repercussions and ensure the safety and well-being of their employees.