Workers Compensation
Definition
Insurance that provides wage replacement and medical benefits to employees who are injured or become ill as a result of their job. Workers comp is required by law in almost every state. It operates as a no-fault system — employees receive benefits regardless of who caused the injury, and in exchange they generally cannot sue their employer for workplace injuries.
When This Matters
A warehouse employee injures their back lifting heavy boxes. Workers compensation pays their medical treatment and a portion of their lost wages during recovery.
Related Terms
Have a question about workers compensation?
Ask the Professor about Workers Compensation →