Zenith National Insurance Corp said Tuesday it will cut 100 positions in response to the economic downturn, which has hurt its main workers’ compensation business as companies lay off workers.

After the market closed, the Woodland Hills-based property-casualty insurer said it will take a charge of about $3.3 million in the first quarter for the cuts, which represents 6 percent of its total workforce. The charge will cover termination benefits, lease termination costs and other related costs. In an unusual move, the company said it will pay the full COBRA health care premiums of terminated employees for up to 18 months.

The company expects annualized after-tax cost savings of $6.5 million from the staff reductions.

Prior to the announcement, Zenith shares closed at down $1.45, or 5 percent, to $26.09 on the New York Stock Exchange.