In most states, workers compensation insurance is required for a majority of organizations.

• A. True
• B. False
• C. Maybe
• D. Cannot be determined

Answer: (A)

Workers’ compensation coverage is typically mandatory for employers that have employees. States require this protection to ensure on-the-job injuries are covered with medical benefits and wage replacement, while also limiting the employer’s liability. Because the vast majority of businesses that hire workers fall under these state requirements, the statement that it’s required for a majority of organizations is correct. There are exemptions in some states for very small businesses, sole proprietors, partners with no employees, or certain industries, and rules can vary about whether corporate officers must be covered, but the overall pattern is that most employers with employees must carry workers’ compensation insurance. Always check your specific state’s thresholds and exemptions to know for sure.