Employers are required to purchase workers' compensation insurance that provides coverage to employees who suffer injuries that are work-related, according to Nolo. Each state has its own set of rules that specifically outline which employers are required to purchase the insurance.
Employers have a few different obligations under the workers' compensation system. If these obligations are not met, fines could be imposed and the injured employee may be able to sue the employer, states Nolo. Employers are also required to post notices and advise their employees of their legal rights, as well as provide the name of the employer's workers' compensation carrier.