How is risk measured for LTPS?
Claims to LTPS are made up of around 80% Employers’ Liability claims and 18% Public Liability claims and a small amount of other claim types. The standard measure of exposure to Employers’ Liability used in the insurance industry is wage roll. However, given that the scheme also covers Public Liability, the number of WTE staff employed by the member and the member’s total income are also taken into consideration to give an indication of the size and risk of claims for each member. Therefore, the contribution depends on the following three risk factors for each member: · Total income; · Number of WTEs; and · Wage roll. The weightings applied to each of these risk factors are reviewed each year, although they are kept as stable as possible over time.
