In many states, employers are required to buy insurance for their employees from a workers’ compensation insurance carrier. Larger employers can self-insure in some states, while smaller companies are not required to carry this insurance. When a worker gets injured on the job, the claim is filed with the insurance company, who will pay disability and medical benefits. Employers without workers compensation insurance can become subject to civil liability, criminal prosecution or fines unless they fall in a limited, exempt category.

If the employer fails to provide workers’ compensation insurance coverage, penalties may include:

• Fines
• Criminal prosecution
• Personal liability for benefits of the injured employees
• Allowing the injured worker to choose between suing the employer instead of filing a workers’ compensation claim