Safety performance workers compensation experience

Experience rating is mandatory for all employers who buy workers compensation insurance from insurance companies. For those employers, experience rating is one of the historical performance measures that can be used, cautiously, as an indicator of the quality of safety in place. Self-insured companies would not have workers compensation experience modifications. 

The actuarial premises on which the workers compensation experience rating system was developed give credibility to OSHA incident recordable and lost workday case rates as measures, and predictors, of safety performance, with these qualifications The statistical base (the hours worked) on which the records are developed has to be large enough and low probability-severe outcome risks may not be encompassed within the experience base. 

Prequalification and selection can range from a simple review of performance data to a comprehensive review of both performance and safety programs. The simplest approach is to request the company s workers compensation Experience Modification Rating (EMR) issued by the company s insurer for the last 3 to 5 years. An EMR of 1.0 is the average for the industry 0.5 is half the industry average, and 2.0 is twice the industry average. More extensive safety information submittals may include any of the examples outlined in Table 5-1. 

Do the OSHA statistics—the recordable case rate and the lost workday case rate —for an exposure of 1,000,000 hours have a confidence level of, say, 68.27%, as measures of the quality of safety performance An entity of this size would more than likely purchase workers compensation insurance and have an experience modification as an additional measure. 

Each workers compensation claim is either directly or indirectly a drain on the profit margin of the company. This is the primary business reason to track workers compensation claims. Many employers who have a less than stellar experience modification rate (EMR) may have difficulty in procuring work, or bidding on work, when perspective buyers assess their safety and health performance. 

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