Workers' compensation covers medical care and lost wages to any employee who gets hurt while working for your business. It also protects your business business from lawsuits an employee may bring against you due to injuries suffered on the job. The number of employees you have will determine whether or not your business is legally required to have workers' compensation insurance. In most cases having 3+ employees means you will need it, but it does vary from state-to-state. You can find your state's workers' compensation office here, which will let you know the exact requirements.