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 North Carolina, workers' compensation insurance is mandatory for most businesses that employ three or more employees, including those operating as corporations, sole proprietorships, limited liability companies, and partnerships. This requirement comes from the North Carolina Workers' Compensation Act. Employers in certain industries, such as agricultural businesses with fewer than 10 non-seasonal workers, may be exempt. Workers' compensation insurance provides benefits for employees who are injured or become ill due to their job. These benefits include medical expenses, wage replacement, and death benefits for dependents of workers who die from job-related injuries. In North Carolina, the exclusive remedy provision applies, meaning that for covered employers, workers' compensation insurance is typically the sole recourse for injured employees, preventing them from suing their employer for negligence. However, if an employer unlawfully fails to carry workers' compensation insurance, they can face penalties and may be exposed to civil lawsuits by injured employees. Noncompliant employers can be charged with a misdemeanor or a felony depending on the circumstances, and the North Carolina Industrial Commission can impose fines and other penalties.