WorkSafeBC Sees Drop in 2006 Overall Premium Rate

WorkSafeBC – the Workers’ Compensation Board for British Columbia, Canada is proposing a 3.5 percent decrease in the overall premium rate for 2006.

The reduction reflects recent years’ trends of stable injury rates, lower duration of injuries, and the success of the WorkSafe initiative – the shared commitment of employers, workers and WorkSafeBC to prevent injuries, diseases and fatalities from occurring.

The 2006 aggregate base rate is projected to be $1.90 per $100 of assessable payroll, compared to $1.97 in 2005. “This is a relatively good news story for B.C. employers because their rates are among the lowest in Canada.” said WorkSafeBC Chief Financial Officer, Sid Fattedad. “While economic expansion in British Columbia means more jobs and thus more claim volumes, the rate at which workers are injured is holding steady and declining slightly. In periods of significant economic growth, it is normal to expect that the injury rate would turn up, however, with the help of employers and workers engaging in safety training and return to work efforts, the cost of injuries is expected to stay on a declining track.”

In recent years WorkSafeBC has maintained stable premium rates for employers. “We have accomplished this at a time when insurance rates for both workers’ compensation and general insurance in North America have typically been increasing substantially.” said Fattedad.

In 2006, lower base rates are projected for hospitals, long term care and short term care, facilities. Each of these industries, along with wharf, marine terminal and stevedoring operations will see a 30 percent reduction in their rates. Other industries that will reportedly witness significant rate reductions are shipbuilding, universities, electric utilities, supermarkets and industrial construction and trades.

Industries whose rates are projected to increase include general retail (10%), public school districts (9%), department stores (14%), telecommunication services (14%), gas utilities ((20%) and general trucking (15.6%). Trucking does not include dump truck operators who will see a 5% decrease in rates. For example, rates in general trucking are rising as a result of significant costs in long term disability, health care, survivor benefits and vocational rehabilitation, an indication of the seriousness of recent claims. There have been 66 fatalities in general trucking over the past five years.

“Premiums are driven by injury costs,” said Fattedad. “Industries can influence their rates by improving safety and return-to-work programs with effective disability management.” To this end, in order to assist industries to lower their injury and premium rates, WorkSafeBC has worked with industry to establish safety associations: in forestry, construction, agriculture and the oil and gas industries, and developed sector-based business teams to work closely with industry and labour groups.

Overall, approximately 60 percent of employers will have no change or a reduction in their 2006 premium rate and 40 percent of employers’ rates will experience an increase.

WorkSafeBC is releasing preliminary rates to provide reasonable notice to employers and an indication of the direction of their premium rates. Preliminary rates are reliable as indicators; however they may differ when final rates are set in October.