Document Detail

Title: RS45-1 - Improved Workers' Compensation Management in Construction
Publication Date: 3/1/1996
Product Type: Research Summary
Status: Supporting Product
Pages: 30
Offers 13 possible courses of action to reduce the costs associated with workers' compensation insurance claims; recommends four additional measures for contractor selection criteria relating to safety.
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Workers’ compensation (W/C) is one of the most pressing problems in the construction industry today. Each of the 50 states has a workers’ compensation law; however, each has wide differences in the costs, benefits, and administration of these laws. To compound the problem, many owners who require the services of a contractor or subcontractors are using the Experience Modification Rate (EMR) as the sole indicator to evaluate a contractor’s safety performance.

The purpose of this research was:

  • To study workers’ compensation practices in the construction industry
  • To identify key elements of effective workers’ compensation management
  • To examine the validity of using the EMR as a sole indicator of contractor safety performance, while at the same time identifying additional evaluation criteria

The CII Workers’ Compensation Insurance Research Team, which conducted the studies, estimated the potential cost savings of implementing improved management practices for workers’ compensation issues in construction. The projections show a potential of $340 million annual savings to the industry.

In this publication, 13 possible courses of action are recommended to reduce the costs associated with workers’ compensation claims. Obviously, the best course of action is to adopt a “zero accident” philosophy and improve safety on projects, thus minimizing the source of claims. Accidents do occur, however, so an efficient system for responding when injuries occur is needed. Besides the 13 courses of action, the team has recommended four additional measures for contractor selection criteria related to safety.