WASHINGTON, D.C. (Aug. 14, 2012) — Workers' compensation coverage for union construction contractors has traditionally been a costly proposition, due to the higher payroll costs associated with a union workforce. However, a partnership between Ullico Casualty Company and the West Virginia Workers' Compensation Consortium (WVWCC) challenges this notion and the result is an insurance captive that serves as model for containing workers' compensation costs for union contractors nationwide.
Formed in 2009, the WVWCC provides workers' compensation insurance to over 30 union contractors that have collective bargaining agreements with the West Virginia building trade unions. To take part in the program, eligible contractors agree to implement extensive risk management and loss controls, but they actively participate in the operation and management of the captive. All members contribute capital in addition to the premiums they pay as policyholders. In return, the contractors enjoy competitively priced insurance premiums that can remain consistently stable over time. In addition, consortium members who have better than expected losses can receive a dividend, which can further reduce the cost of premiums or other variable expenses. Ullico Casualty, through its Ullico Risk Solutions unit, underwrites the program.
“This effort was a perfect fit for Ullico,” said Edward M. Smith, president and CEO of Ullico Inc. “We understand the union marketplace and how a cooperative, high quality approach to workers' compensation is a win-win-win for workers, employers and insurance companies.”
Ullico's partnership with the WVWCC has resulted in decreases in workers' compensation premiums for both labor and management. During its first year, the captive enjoyed a loss ratio of less than 35 percent. The number of members in the program has more than doubled since its inception, despite an increasingly competitive market that has resulted from the ending of the state's monopoly on workers' compensation coverage in 2008. In addition, costs for members continue to decline due to the organization's commitment to improving safety and resolving claim disputes quickly and efficiently.
“We believe in the program, and the contractors believe in themselves,” said Steve White, director of the Affiliated Construction Trades, a division of the West Virginia state building trades. “We all work together to focus on safety to keep costs down. It is really a win-win situation for everybody. It is the perfect way to go.”
To learn more about the West Virginia Workers' Compensation Consortium, visit http://youtu.be/nTG82hT151Y.
For 85 years, Ullico Inc. has served the union workplace. From insurance products for union members and innovative risk management solutions for contractors and employers, to investments in commercial real estate projects that have created thousands of union jobs, Ullico is a proud partner of the American worker. Ullico is a $5 billion insurance and financial services holding company whose subsidiary companies include The Union Labor Life Insurance Company; Ullico Investment Advisors Inc.; Ullico Investment Company; Ullico Casualty Company; and Ullico Casualty Group Inc. Headquartered in Washington, D.C., Ullico Inc. has regional offices in New York, Chicago, San Francisco and Silver Spring, Md. It is the only insurance and investment company that is labor-owned, which is why union members and employers across America trust Ullico with protecting their families, employees, businesses and investments. For additional information, visit www.ullico.com.
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Ben C. Hardaway
Senior Media Relations Manager