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In the context of workers' compensation insurance, the correct designation for most states is that it is compulsory. This means that businesses are legally required to obtain workers' compensation insurance to cover their employees. This requirement helps to ensure that employees who suffer work-related injuries or illnesses have access to necessary medical treatment and financial support during their recovery process.

The term "advisory" would suggest that the purchase of workers’ compensation insurance is recommended but not mandated by law, which is not the case in most states. Similarly, "elective" implies that employers have the choice of whether to purchase insurance, while "optional" would indicate that there is no legal obligation. Both of these terms do not accurately reflect the legal framework surrounding workers' compensation in the majority of states, where failure to comply with the compulsory requirement can lead to penalties and legal repercussions for the business.