How to Avoid Paying too Much Workers Compensation Insurance

Whether you run a small, medium or large business; once you start employing people you’re obligated in Australia to take out workers compensation insurance.

This essential insurance covers against potential work-related accidents and injuries. It’s also ‘no-fault’, which means injured employees aren’t required to prove their employer was negligent to claim compensation. Ultimately, this reduces the risk of litigation for employers.

To find the best workers compensation insurance quote for your needs and fully protect your business, employers must understand their cover. Here’s how to make sure you’re not over-paying your insurance.

How to Find the Right Workers Compensation Insurance Quote

Workers compensation can cover against medical costs for work-related injuries and accidents, lost wages, ongoing care and funeral costs and death benefits. However, not all covers, policies or insurance companies are equal.

To choose the right quote for your business needs:

  1. Compare at least three quotes. Researching multiple insurance companies and policies will help ensure you have one that protects you, without over-paying
  2. Engage with a specialist insurance broker. They can assist with the research and comparing stages, and also have the right skills to negotiate costs and navigate you through the complexities. Insurance brokers may also customise policies to find the most suited for your industry needs

How Much is Workers Compensation Insurance?

The costs and premiums of workers compensation can be complex. What you pay depends on multiple factors, including choice of insurance company and whether you have an insurance broker represent you.

Although prices vary, state sites such as WorkCover will have recommended premium rates. These should only be used as a guide.

 Workers compensation costs can also be reduced by:

  • Setting up a safety program to minimise risks and better manage workplace health and safety. Learn how to build one here
  • Seek resources, invest in training and regularly review your safety program. Once it’s in place, it’s not a set-and-forget tool
  • Build a return-to-work program. This will help to maintain workplace ties with injured employees, get them back to work safely and quickly, and provide additional support

Could You be Paying too Much Premium?

Typically, the cost of premiums are calculated as a percentage of annual employee’s wages cost. Your business industry and claims history are also factored in. But, the rules and regulations differ between states, regions and insurance companies.

Specific formulas are used to determine these calculations, which are regulated by each state government. To find out your Australian workers compensation requirements or state schemes, check FairWork, Safe Work Australia or

To avoid paying high workers compensation premiums or incorrect amounts you should:

  • Annually review insurance premiums to see if anything has changed or certain covers are no longer needed and still being paid for
  • Check how your premium is structured. Using the services of an insurance broker, they will work with you to look for ways to reduce it or structure it differently
  • Check for overpayments and arrange for refunds if discovered
  • Check the fine print – one cover isn’t the same for all
  • Review your industry and WorkCover obligations to ensure you comply

Although most workers compensation covers include income replacement, medical and rehab costs, permanent disability payments, death benefits and return-to-work plans, what your chosen cover includes and the regulations behind each cover is set by government departments and legislation in your location.

No matter how safe you think your business is, accidents in the workplace happen. To minimise the risks, abide by state regulations and protect your business and its employees, taking the right action with cover is crucial.

Author Bio

This article is written by Jayde Walker (Ferguson), who recommends Bruce Insurance – Western Australia’s leading business insurance broker. You can catch her on LinkedIn.