What is the primary function of worker's compensation insurance?

The primary function of worker's compensation insurance is to provide wage replacement and medical benefits to employees who are injured or become ill as a result of their job. This type of insurance is designed to ensure that workers receive financial support for medical expenses and lost income due to work-related injuries or illnesses, thereby promoting their recovery and return to work.

By providing these benefits, worker's compensation helps protect employees from financial hardship during a difficult time, while also offering legal protection for employers against lawsuits related to workplace injuries, since employees typically waive their right to sue in exchange for these guaranteed benefits. This system fosters a safer workplace environment as both employees and employers are incentivized to prioritize occupational health and safety.