If your business has any employees, then workers' compensation is a must. Essentially, it is a type of accident insurance paid for by employers which provides coverage should an employee be injured on the job. The insurance will pay for medical-related costs and will provide wage-loss compensation in the event that the employee is unable to work for a period of time following the accident/injury. Workers' compensation also applies to circumstances when an employee contracts a work-related illness. Workers' compensation is solely the employer's responsibility – there are no deductions made from the employees' salaries in order to pay for it.