Which of the following best describes the purpose of Workers Compensation insurance?

The purpose of Workers Compensation insurance is fundamentally to provide benefits required by law for employees who are injured or become ill as a direct result of their job duties. This insurance serves as a safety net for workers, offering them medical benefits and a portion of their lost wages if they are unable to work due to a work-related injury or illness.

By having this insurance, businesses comply with legal obligations while simultaneously protecting their workforce. It not only helps injured employees by providing necessary financial support for recovery, but it also limits the legal liability of employers, as employees generally cannot sue for workplace injuries if they are covered under Workers Compensation. Thus, the focus on legal compliance and employee welfare through mandated benefits defines the primary role of Workers Compensation insurance.

Other options relate to broader business considerations. Covering business losses, ensuring profitability, or managing operational costs are important aspects of running a business, but they do not capture the specific purpose of Workers Compensation, which is centered on worker protection and legal compliance regarding occupational injuries and illnesses.