Companies are required by law to purchase workers' compensation insurance to protect employees suffering work-related illnesses or injuries against lost income and to pay the associated medical treatment for these employees.

While establishing and administering a workers' compensation program can be expensive for a growing company, the cost can be reduced with the use of managed care, return-to-work, vocational rehabilitation and other special cost containment programs and services. Employers can also minimize workers' compensation costs simply by creating a safer work environment – one where employee illnesses and injuries are less frequent and severe.