In many countries, accident compensation is one of the most important factor that motivates the constractors and clients to provide sufficient safety measures to their workers. Yet relationship between various factors are under study. This paper aims to study the various factors which affect the compensation on sites via construction of building safety index via structural equation modelling approach.

Court cases dated from 1982 to 2015 which are all related to construction accident in Hong Kong are collected. 14 categories of information have been recorded and have been used to construct the model and have been estimated. Those 14 variables are age of plaintiff, gender of plaintiff, plaintiff’s monthly income before accident, future loss of earning, pre-trial loss of earning, loss of earning capacity, special damage, future treatment, death of plaintiff, duration of judgment, level of court, contributory negligence and PSLA. Finally, there is a latent variable called level of injuries has also been included in the model.