What does workers' compensation insurance primarily cover?

Workers' compensation insurance is primarily designed to provide coverage for medical expenses and income replacement for employees who suffer work-related injuries or illnesses, irrespective of fault. This means that if an employee is injured while performing their job duties, workers' compensation insurance will cover their medical bills and provide partial wage replacement without the need for the employee to prove that the employer was negligent or responsible for the injury.

The concept behind this insurance is to protect both employees and employers: employees receive the benefits they need after an injury, while employers are protected from lawsuits related to these injuries. This system is based on a no-fault principle, meaning that employees can receive benefits regardless of who was at fault for the incident.

In the context of the other choices, liability to the employer does not accurately represent the primary coverage provided by workers' compensation, which focuses on the employee's benefits rather than liabilities toward the employer. Employee health insurance costs are a separate matter and are typically covered under different insurance policies. Although liabilities incurred from employee negligence might involve legal considerations, they are not covered by workers' compensation, which is intended to avoid such complexities by providing a straightforward avenue for employee injury claims.