What It Protects Against: Lawsuits arising from workplace accidents. It provides medical care and lost wage benefits to an injured employee, along with other compensation.

How it Works: Workers Compensation insurance is no-fault insurance designed to protect against suits from employees who become ill, injured or are killed as a result of job related injuries. It also protects employers because it most often provides immunity from suit for employers that carry such coverage. Employers who do not subscribe to workers' compensation coverage have no immunity from lawsuits resulting from work related accidents suffered by employees and are faced with an increased evidentiary burden in such suits.

Who needs it: Virtually every employer. Businesses are required to buy workers' compensation insurance or risk an increasing evidentiary burden in any lawsuit that results without the employer carrying workers' compensation insurance.

What you need to know: Benefits of workers' compensation insurance include the amount and duration of medical services and rehabilitation as well as death benefits, if applicable. Workers Compensation coverage is sold as a separate policy.