What is the primary purpose of workers' compensation insurance?

The primary purpose of workers' compensation insurance is to cover costs associated with workplace injuries. This insurance is designed to provide financial and medical benefits to employees who suffer work-related injuries or illnesses. It ensures that employees receive necessary medical treatment and compensation for lost wages while they are unable to work due to their injury. By doing so, workers' compensation acts as a safety net for employees, protecting them from the financial burden that can result from workplace incidents.

This insurance system also provides an essential benefit to employers by limiting their liability in case of work-related injuries, as employees typically forfeit the right to sue their employer in exchange for guaranteed benefits under workers' compensation. Therefore, the focus on covering costs related to workplace injuries highlights the fundamental intent of this type of insurance.