How to Reduce the Cost of Workers Compensation?

Workers' compensation insurance is usually purchased by the owners of factories, mines and contractors to provide coverage to the unskilled, semi-skilled and skilled workers in case of any mishap that leads to partial or permanent disability as well as death. Workers' compensation insurance is usually purchased by the owners of factories, mines and contractors to provide Under the Workers Compensation Act 1923, it is mandatory for employers to provide workers comp. However, there are a few ways through which the employer can reduce the worker compensation cost.

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Educate Employees on Workplace Safety

To reduce the cost of workers compensation insurance, an employer must consider educating employees on workplace safety. In order to do that employers must train their employees before letting them do the work on their own.

Employers must make sure that the employees wear safety gear while working on any machine or with any equipment such as gloves, helmets, etc. Also, encourage employees to report any workplace hazard that could cause harm to anyone at the workplace or the employer himself can do an inspection to keep a check on things.

Provide First Aid & Quality Medical Care

One of the most important requirements in the workplace is first aid. There are times when a worker gets injured and due to late medical attention, the situation worsens leading to a severe medical condition and increasing the medical cost as well.

Using first aid and calling the right medical service providers as quickly as possible lowers the chances of high medical bills as well as a lawsuit. Hence make sure to keep a first aid kit and get them installed on every floor of your building and provide quality medical care.

Return to Work Program

Return to work program can also help in reducing the workers compensation cost as well as lower the number of workdays lost due to illness or accidents.

A return to work program must be designed to get the injured employees back to office as quickly and safely as possible. After the return of the injured employee, the employer can assign them light work or part-time shifts until they totally recover.

Here are few ways through which the return to work program will help in lowering the workers compensation cost:

  • It will reduce the need to hire and train a new worker
  • It will lower the overtime pay of the current workers who have to take care of the additional work due to a shortage of workers
  • Prevent the drop in productivity and morale as the employees would know that the employer will take them back to their employees as it will give them a sense of job security

Find Right Workers Compensation Insurance

Employer Reduce Worker Compensation

Even after following the above mentioned points, if you find that the worker's compensation cost is still high then it is time that you should start looking for the right worker's compensation insurance plan. It is recommended to review the policy once every few years as well.

There are many insurance providers with different workers compensation insurance plans and while searching for the right insurance plan, make sure to do thorough research according to the number of employees working in the company/factory, their age, their daily wage, etc. as these factors will affect your insurance premium.


To reduce the workers compensation, we have mentioned the required measures that you as an employer will have to take. However, it is highly recommended to purchase a workers compensation insurance policy as it will provide you with financial coverage and you will not have to pay for the expenses out of pocket.

Written By: PolicyBazaar - Updated: 08 September 2022

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Policybazaar for Business - Workmen Compensation Insurance - Customer Reviews
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