By: John True, CPCU, AAI, CIC
Director
Mid-Atlantic Surety
Every year, the New Jersey Compensation Rating and Inspection Bureau (NJCRIB) promulgates changes to rates, benefits and other portions of the program. The following information applies to 2007:
Rates
Effective January 1st, new rates take effect for the 587 classification codes in the NJCRIB manual. Overall, the 2007 rate levels increased 1.3% over 2006.
Three hundred and thirty-two (332) classifications developed increased rates, 229 classifications decreased, and 16 remained unchanged (9 classifications have no rate assignment).
Some examples of rate changes:
| CLASS |
2006 |
2007 |
| 5445 Drywall |
$6.93 |
$7.64 |
| 5403 Carpentry |
$13.50 |
$13.69 |
| 5409 Cielings |
$5.78 |
$5.88 |
| 3030 Iron Shop - Structural |
$18.47 |
$19.50 |
| 3040 Iron Shop - Ornamental |
$10.42 |
$11.31 |
| 5057 Iron Erection |
$13.62 |
$13.33 |
| 6039 Grading of Land |
$6.86 |
$7.10 |
| 6217 Excavation |
$8.62 |
$7.83 |
| 5474 Painting |
$11.44 |
$11.61 |
| 5491 Paperhanging |
$3.28 |
$3.22 |
Benefits
Maximum weekly benefits have increased to $711 from $691; minimum benefits will increase to $190 from $184 (for permanent partial disabilities, the benefit can vary based upon the duration of the disability).
Officer Payrolls
Executive Officers’ weekly maximum payroll increased to $1,970 from $1,900; weekly minimum payroll increased to $490 from $480.
Construction Classification Premium Adjustment Program
The average hourly wage required for eligibility is $24, which earns a starting credit adjustment of 5%. The program provides up to a maximum credit adjustment of 25% at an average hourly wage of $39 or higher.
Catastrophe Provisions
A Foreign Terrorism Premium Charge (formerly known as the “Terrorism Risk Insurance Charge” of $.03 per $100 of payroll remains in place – insurance companies can deviate upward from this rate.
A Domestic Terrorism, Earthquakes and Catastrophic Industrial Accidents Premium Charge of $.01 per $100 of payroll is applicable.
United States Longshore and Harbor Workers (USL&H)
The increase percentage applicable to non “F” classifications when coverage is provided under the USL&H Act remains at 50%.
Surcharges
| Second Injury Fund |
6.31% of modified premium |
| Uninsured Employers Fund |
0.00% of modified premium |
| Expense Constant |
$200 Flat Charge |
Plan Premium Adjustment Program
A minimum 10% adjustment factor is applied to all risks insured in the New Jersey Workers Compensation Insurance Plan (except those issued or audited at minimum premium). The adjustment factor can be as high as 30%.
No Premium Discount factor will be applied to Plan policies.
Schedule Rating Plan
Insurance companies can apply a subjective rating factor within a range of plus 10% or minus 10% to premiums.
Conclusion
While General Liability, Automobile and Umbrella policies continue to experience “soft” market pricing and availability, Workers’ Compensation underwriting remains somewhat challenging, particularly for interior finishes contractors.
Contractors should obtain their updated factors, including Experience Rating factors, as early as possible and apply them in their bid calculations.
About the author: John True, CPCU, AAI, CIC is a Director at Mid-Atlantic Surety LLC, an insurance agency specializing in construction bonds and insurance. He has been an active member in the construction industry for over 25 years. He is an ASA-NJ officer and Chairman of the Insurance Committee.