Pricing and calculation
Policy premiums are collected to cover the cost of claims and associated expenses when someone is injured at work.
The premium you pay for your workers compensation policy is determined by a number of different factors.
These include:
- the wages you pay to your workers
- your premium risk category or categories
- claims experience (the cost of workers compensation claims)
- the size of your business (based on wages).
Calculating your premium
Your base premium is determined by multiplying your wages by your premium risk category rate. That premium is then adjusted for your size (based on your wage roll) and finally, discounted or increased based on how your claims experience compares to the other employers in your risk category.
Your premium calculation sheet that is sent with your renewal notice each year clearly sets out the premium formula and enables you to see how your performance compares to others in your premium risk category or categories. It also provides you with a clearer view of how your own injury prevention and injury management performance affects your final premium rate.
Premium capping arrangements
The underlying objective of the CMI Scheme’s premium system is to ensure premiums remain stable, affordable and fair for employers while providing a sustainable Scheme.
To further that aim, premium capping arrangements are applied in the premium calculation. These are designed to limit the unintended impact of occasional as opposed to systemic poor claims experience, while helping to ensure policyholders pay a premium that is closely aligned with their risk. The capping arrangements also aim to provide small employers (those with wages less than or equal to $2.5m) with greater premium stability.
Small employers (wages less than $2.5m)
- Premiums will be set equal to the Base Tariff Premium (BTP)
Large employers (wages greater than $2.5m)
Premium capping will be applied based on a policy’s BTP. See below:
- BTP less than or equal to $500,000; a cap of 1.5 times the BTP
- BTP greater than $500,000 and up to $1.5m; a cap of 2 times the BTP
- BTP greater than $1.5m and up to $3m; a cap of 2.5 times the BTP
- BTP greater than $3m; a cap of 3 times the BTP
The minimum premium rate
The minimum premium rate ensures all employers pay their fair share of the Scheme’s administration costs. This includes the fixed costs of underwriting each policy and other non-claim related expenses.
For the 2024-25 policy year the minimum premium rate is set at 1.06 per cent.
The minimum premium payable on any CMI policy including short term periods of insurance is $200.00 + (Plus Mine & Petroleum Site Safety Levy if applicable) + GST.
Premium categories that reflect your risk
Coal Mines Insurance (CMI) allocates covered wages to six premium risk categories that best reflect the specific risk exposures associated with different activities undertaken across the coal industry.
The multi-category policy model allows policyholders to declare wages in more than one premium risk category and have their final policy premium rate calculated on that basis. This means that your policy premium rate will be closely aligned to the overall risk profile of your business.
Questions to ask yourself when determining your risk category(ies):
- What are my day to day business activities whilst on a coal mine?
- Where on a mine site are my activities performed? e.g. underground, in the pit of an open cut mine, coal preparation plant, workshop, office etc.
- If my business activities are performed in different areas of a mine site or both on and off a mine site, how much time do I spend on each activity?
- What activities do I perform whilst not on a coal mine that is related to the coal mining industry?
CMI Risk Categories
| Premium risk category | Description |
|---|---|
| Open Cut Mine |
All activities undertaken by operators, contractors and labour hire in the pit and surrounding areas of an open cut mine site. Activities include:
|
| Underground Mine |
All activities undertaken by operators, contractors and labour hire in the pit and surrounding areas of an underground mine site. Activities include:
|
| Onsite Operational Mining Services |
All activities undertaken in workshops, coal preparation plants, coal washeries, coal loaders ON a mine site and general activities listed below. Activities include:
|
| Offsite Operational Mining Services |
All activities undertaken in workshops, coal preparation plants, coal washeries, coal loaders NOT ON a mine site and general offsite area activities listed below. Activities include:
|
| Onsite Administration |
All activities undertaken in an office building ON a coal mine site. Activities include:
|
| Offsite Administration |
Administration activities undertaken in an office building NOT ON a mine site related to the running of a coal mine. Activities include:
|
Business activity list added since the change to the Coal Industry Act 2001 (NSW)
Activities include:
- Construction work on a mine site
- Drilling Services, including exploration drilling
- Mine site rehabilitation
- Earth moving, Site Preparation, Excavation services
- Coal Train Drivers/ Assistants
- Erecting and Dismantling Scaffolding
- Cleaning Services (admin building, Bath House, Lunch rooms Pit facilities)
Business activity exclusion list
Activities carried out on a coal mine site NOT required to hold a policy with CMI.
Activities include:
- Delivery services (e.g. fuel, equipment, general deliveries)
- Servicing of office equipment (e.g. printers, photocopiers, computers, food vending machines)
- Visits to a mine site (e.g. by insurance brokers, solicitors, accountants)
- Heritage work conducted by Aboriginal land councils
- Residential noise monitoring not related to running a coal mine
- Environmental water monitoring not related to running a coal mine
- National power line constructions through a mine site
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