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 Tennessee, workers' compensation insurance is mandatory for all employers with five or more employees, with certain exceptions such as agricultural workers, domestic workers, and those covered under federal programs. Employers in the construction industry or trades must carry workers' compensation insurance if they have one or more employees. This insurance provides benefits for medical expenses, lost wages, and rehabilitation costs for employees who are injured on the job or suffer work-related illnesses. Death benefits are also available for the dependents of workers who die as a result of job-related injuries. Tennessee law provides the exclusive remedy provision, meaning that for employers who carry workers' compensation insurance, employees generally cannot sue the employer for workplace injuries or illnesses; the workers' compensation system is the sole recourse for recovery. Employers who fail to carry the required insurance (nonsubscribers) may face penalties and are not protected by the exclusive remedy provision, leaving them open to personal injury lawsuits by injured employees.