Workers' compensation insurance is designed to compensate employees for injuries suffered on the job. It is paid for by the employer, and is a required form of insurance. The level of benefits paid varies by state, which also impacts the cost of this insurance. The amount of insurance paid varies significantly by type of job. For example, the insurance for white-collar positions is typically much less expensive than blue-collar positions, since there is a lower risk of injury in white-collar positions. An employer may be required to pay more insurance if it has an excessive history of employee injuries. Workers' compensation insurance is usually available through insurance companies. In a few states, however, the insurance must be purchased through a state-operated fund.
This form of insurance keeps employees from having to sue their employers to prove fault and obtain payment. In return, employers no longer have to deal with such lawsuits.