Workers' compensation is a mandatory business insurance that provides employees who become injured or ill while on the job with medical coverage and income replacement. Workers' compensation also protects companies from being sued by employees for the workplace conditions that caused such an injury or illness. Businesses are required by law to pay for the medical treatment and lost wages of employees who suffer job-related injuries or illnesses. In most cases the employer is not liable for accidents occurring outside the place of work, or for those which have not arisen directly from employment.

Workers' compensation statutes vary by state. The Federal Employment Compensation Act covers non-military federal employees or those workers employed in some significant aspect of interstate commerce.

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Teresa R. Wade
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