SAN FRANCISCO - Calling it an effort to slash their workers' comp insurance costs, about 20,000 California-based construction firms united to form the Golden State Builders Exchanges (GSBE). The GSBE then chose the State Compensation Insurance Fund to create a saftey group within its comprehensive group insurance program.

The partnership between what is now California's largest construction industry organization and the state's largest workers' comp carrier will save the contractors an estimated 12 percent, some $6 million less than the $49 million estimated annual premium. The State Fund was an active participant supporting formation of GSBE.

No fewer than 29 independent Builders Exchanges from around the state came together to form GSBE. Typical of a traditional safety group, the alliance will promote workplace safety as well as lowering workers' comp premiums for its member firms. Kent Dagg, president of GSBE, said that the alliance offers unparalleled economies of scale, and that all of its members have access to the resources and services of the state's largest workers' comp carrier, "including workplace education and safety programs considered to be the industry benchmark."

State Fund Vice President J.C. Jim Tudor said that the carrier is excited to be part of the partnership with GSBE which would "deliver numerous business and competitive advantages" to its members, "including more flexible pricing plans, an additional dividend bonus calculation and extensive loss control services."

The executive director of the Salinas Valley Builders Exchange, Gwen Miller, explained that the group insurance program provides cost-control services critical to an industry that has historically paid among the highest overall rates of any California industry.