Premium-Rating Model for Workers’ Compensation Insurance in Construction
Publication: Journal of Construction Engineering and Management
Volume 134, Issue 8
Abstract
Providing adequate workers’ compensation insurance (WCI) is mandatory by legislation in most countries for employers to hire workers. It is enforced to safeguard the interests of occupational injury victims while eliminating their employers’ financial burden of compensation. WCI’s significance in construction is immeasurable because the construction industry appears to be recording higher injury and fatality rates globally. On the other hand, insurance companies must be meticulous in deciding premiums for WCIs for construction projects. Traditionally, insurers have been adopting the experience modification rating technique for premium-rating of WCI. However, this technique has been proven ineffective for construction applications due to the unique characteristics of construction projects. Hence, a new premium-rating model for construction was developed and tested in the Singapore general insurance industry. The proposed model streamlines structured analyses of project hazards, contractors’ safety management systems, market conditions, and insurers’ internal factors to decide optimal premiums. Moreover, it infuses the partnering notion in WCI for construction. The implementation of the proposed model in the insurance industry would facilitate accident control in the construction industry and thereby loss minimization for insurers.
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Information & Authors
Information
Published In
Journal of Construction Engineering and Management
Volume 134 • Issue 8 • August 2008
Pages: 601 - 617
Copyright
© 2008 ASCE.
History
Received: May 17, 2006
Accepted: Feb 4, 2008
Published online: Aug 1, 2008
Published in print: Aug 2008
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