Workers' compensation is a type of insurance that is mandated by the state. It is purchased by employers as a way to cover the costs of payments that are made to an employee if he or she becomes injured while on the job and can no longer work.
Although the amount of money that an employee will receive as a payment through workers' comp is a relatively small amount, the insurance does cover other costs that the employee might incur. As an example, workers' comp covers the medical care that the employee receives due to his or her injuries. This may include doctor visits, x-rays, surgery and even follow-up medical care if it is needed.