The US Department of Labor logs a weekly record of the number of claims filed and payouts for US employees—these are the numbers as of the 28th of December, 2025:
- Applications filed: 369,422
- Cases: 252,113
- Total applications with compensation paid: 154,280
- Total Compensation Dollars Paid: $16,076,706,618
Over $16 billion in compensation payouts and almost 370 thousand claims in 2025 prove it’s not exactly a small risk that one day, an employee will make a claim against your business.
Any growing business with one or more employee/s is at risk, and workers’ compensation is an excellent fallback.
Read on for a comprehensive guide on what you need to know about a workers’ compensation policy.
Why Every Business Needs Workers’ Compensation Insurance
In every state in the US, other than Texas, it’s a legal requirement to have workers’ compensation insurance as soon as you hire one employee.
More than simply being the law, as soon as you employ people, you take on responsibility for their safety at work.
That applies whether you run a construction company, an office-based consultancy, a retail store, or a hybrid remote team.
And accidents don’t have to be dramatic to be costly. A slip, a repetitive strain injury, a lifting issue, or even stress-related claims in some jurisdictions count as a potential claim.
Workers’ compensation exists to manage that exposure.
Without coverage, medical costs, lost wages, sickness, medical bills, and potential legal action would be almost impossible for a growing business to cover.
The Level of Protection It Provides
Workers’ compensation insurance creates a structured response to claims.
It typically covers:
- Medical expenses
- Lost wages
- Job retraining
- Permanent injury benefits
- Employers’ liability
- Survivor benefits and death benefits
The actual level of cover depends on the policy, but it’s easy to find a quote online, and that applies to workers comp insurance for self-employed business owners.
For employers, workers’ compensation limits the ability of employees to sue the business directly for workplace injuries.
That trade-off protects both sides. Employees still receive guaranteed support from insurance payouts, and employers reduce the risk of prolonged legal disputes.
This stabilizes operations, and instead of navigating disputes ad hoc, the business follows a defined process that keeps situations from escalating.
How Workers’ Compensation Insurance Works
The process is relatively straightforward, but it will differ depending on the insurance provider and the type of claim.
A business purchases a workers’ compensation policy based on factors such as industry, number of employees, payroll size, and risk level. Higher-risk roles typically mean higher premiums.
If an employee is injured or becomes ill due to work-related activities, a claim is filed. The insurer then assesses the claim and covers eligible costs following the policy terms. For the business, it means access to care and income support when needed.
What matters most is accuracy. Misclassifying employees, underreporting payroll, or misunderstanding coverage can cause claim issues. Growing businesses often make these mistakes unintentionally as they scale quickly.
Are the New Generation of Workers More Likely to Claim Now?
There’s clear evidence that reporting behavior has changed.
Data from 2024 and 2025 show that younger workers are more likely to report workplace injuries than previous generations.
According to Fit For Work, workers aged 15–24 years report higher rates of job-related injuries than older workers.
And according to labor and insurance industry reports, workers under 35 are significantly more aware of their rights and more willing to use formal reporting channels.
This doesn’t necessarily mean workplaces are more dangerous, but it does reflect cultural shifts. Younger workers are less likely to push through injuries. Mental health and repetitive strain are also taken more seriously.
Considering you can get a quote in minutes and that the number of claims in the US is so high, it doesn’t make sense not to have workers’ compensation insurance.
It’s literally the law in most states, apart from one, and even in Texas, most businesses have it, the benefits far outweigh the relatively small business expense of a monthly premium.
