What is "workers' compensation insurance"?

Workers' compensation insurance is specifically designed to provide wage replacement and medical benefits to employees who are injured or become ill as a direct result of their job. This type of insurance is fundamental to protecting workers, ensuring they have financial support during their recovery period while also covering necessary medical expenses related to their work-related injuries.

The structure of workers' compensation means that employees are generally prohibited from suing their employers for negligence; instead, they receive these benefits regardless of fault, which simplifies the claims process for both parties. As a result, this insurance fosters a safer workplace environment by encouraging employers to maintain health and safety standards.

In contrast, the other choices relate to different types of insurance coverage. Insurance for property damage during work hours pertains to protecting physical assets rather than employee welfare. Business liabilities coverage focuses on protecting the business from various claims brought by third parties, which is outside the scope of employee injuries. Lastly, insurance that protects employers from lawsuits might provide some overlapping benefits with workers' compensation but does not encompass the medical and wage replacement benefits essential to worker support after injuries sustained on the job.