Insurers: Good safety record matters more

Insurers: Good safety record matters more
Insurers say good safety records will help reduce the  amount of premiums charged for employees compensation insurance (Danny  Chung)

Insurers say good safety records will help reduce the amount of premiums charged for employees compensation insurance (Danny Chung)

Having a good record for safety is far more an important factor in reducing premiums for employees’ compensation cover rather than simply relying on a Pay for Safety Scheme in the contract, according to the insurance industry.

“Insurers generally are wary of simply reducing premium rates to recognize this Pay for Safety initiative. They have tried and tested premium rating models and if a client and/or contractor has a good loss experience overall they will rate accordingly,” an industry source said.

“In other words they are already rewarding good loss experience where earned,” he added.

According to the source, employees’ compensation cover is a problem for insurers due to having their fingers burnt in the past while providing this cover.

At present, the premium rates could be anywhere from one to two percent of the contract sum for building work while the percentage for civil engineering work was from one to three percent.

While it was imperative to display a good safety record on public works projects, having a good safety record was also important when bidding for private sector work.

“To our knowledge quite a number of private sector clients definitely ask for the recent EC loss experience of the bidding contractors,” the source said.

Danny Chung

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