"Workers' compensation" refers to a system of laws outlining specific benefits to which injured employees are entitled, and the procedures for obtaining such benefits. Every state has its own workers' compensation laws, which are contained in statutes and vary somewhat from state to state. In addition, there are special workers' compensation laws for employees of the federal government, and still others for workers in specific types of industries such as railroad employees.
Under the law in most states, every business must have some form of workers' compensation insurance to cover injured employees. Filing a workers' compensation claim is similar to filing an insurance claim; it isn't a lawsuit against an employer, but rather a request for benefits.