Workers’ compensation insurance or workers’ comp provides medical and wage benefits to people who are injured or become ill at work. Coverage also includes employee rehabilitation and death benefits. This policy is required in almost every state for businesses that have employees. Workers’ compensation insurance is purchased by businesses, and is underwritten by insurance companies and, in some states, underwritten by publicly supported state funds. 


Workers’ compensation insurance is important for small business:

  • That protects not only your employees but your small business too.
  • That provides expenses to employees who are injured or become ill “in the course and scope” of their job. 
  • Most policies also cover the cost of employee lawsuits related to a work injury.
  • All states, with a small number of exceptions, require businesses to purchase workers’ comp coverage for those employees.

What to do so that you and your employees do not get into a difficult situation? Choosing to forgo workers’ comp coverage puts your business at high financial risk. Those policies include employer’s liability insurance to protect your business if an injured worker files a lawsuit against you for not preventing a workplace accident.

Injured paper man with money under Workers Compensation umbrella

A frequently asked question։ Does workers’ compensation cover employees who contract COVID-19?

As Compensation protects employees from on-the-job injuries and illnesses and if an employee contracts the coronavirus while working, then this policy should provide coverage. 

Each state has unique laws and penalties for workers’ compensation insurance. For example, Texas is the lone state where business owners are never required to purchase workers’ comp. In California, workers’ compensation is mandatory for all employers, even if the company only has one employee.

In New York, according to state law, there are very limited instances when an employer would be exempt from this requirement. 

  • If the business is owned by one individual and there are no employees.
  • If the business is a partnership or corporation and has no employees. 
  • If the business is owned by one or two people and there are no additional employees.

Contact us at 323-538-5358 or write to us via and we’ll help you answer any state-specific questions you have about your coverage.