Definitions Related to Pre-Qualification Questionnaire

SELECTION OF SAFE CONTRACTORS

The following is an explanation of information required for Attachment II:

Three sources of information provide ways for owners to evaluate the probable safety performance of prospective contractors:

- Experience modification rates for workers' compensation insurance
- OSHA incidence rates for recordable injuries and illnesses
- Contractor safety attitudes and practices

The reliability of OSHA incidence rates is solely dependent on judicious reporting by the employer, while the EMRs are established by independent rating bureaus. Although the EMR is a more objective measure than the OSHA incidence rate, there is a correlation between them. Both will indicate past safety performance.

Experience Modification Rates for Workers' Compensation Insurance

The Experience Modification Rate is a widely used indicator of a contractors past safety performance.  The insurance industry has developed experience rating systems as an equitable means of determining premiums for workers' compensation insurance. These rating systems consider the average workers' compensation losses for a given firm's type of work and amount of payroll and predict the dollar amount of expected losses to be paid by that employer in a designated rating period, usually three years. Rating is based on comparison of firms doing similar types of work, and the employer is rated against the average expected performance in each work classification. Losses incurred by the employer for the rating period are then compared to the expected losses to develop an experience rating.

Workers' compensation insurance premiums for a contractor are adjusted by this rate, which is called the experience modification rate (EMR). Lower rates, meaning that fewer or less severe accidents had occurred than were expected, result in lower insurance costs. A contactor's EMR is adjusted annually by using the rate for the first three of the last four years.

OSHA Incidence Rates

The Occupational Safety and Health Act (1970) requires employers to record and report accident information on Occupational Injuries and Illnesses Annual Survey Form No. 300 & 300A. The employer must retain completed forms for five years.

Information available from a contractor's OSHA Form No. 300 & 300A includes:

- Number of fatalities
- Number of injuries and illnesses involving lost workdays
- Number of injuries and illnesses involving restricted workdays
- Number of days away from work
 - Number of days of restricted work activity
- Number of injuries and illnesses without lost workdays

A contractor, having the number of hours his employees worked during the year, can compute incidence rates for any or all of the items above using the following formula:

No. of incidents x 200,000 hours
No. of hours worked = ie: Incidence Rate

(The 200,000 hours in the formula represents the equivalent of 100 employees working 40 hours per week, 50 weeks per year, and is the standard base for incidence rates.)

In calculating the OSHA recordable incidence rate, the number of incidents in the formula are the total of the number of fatalities, injuries and illnesses involving lost and restricted workdays, and injuries and illness without lost workdays.

 

The OSHA incidence rates also show past safety performance. Since these are uniform national statistics, there are no limitations in comparing rates in one part of the country with those in another. Moreover, OSHA incidence rates reflect more recent experience than EMRs. Owners should request, from contractors, OSHA incidence rates for recordable injuries and illnesses for the three most recent years.

Contractor Safety Attitudes and Practice
The safety attitudes and practices of a contractor are helpful in evaluating his safety and health capabilities. Owners should look for: management accountability; a qualified staff; written safety and health programs; regular orientation of foremen and new workers; frequent, effective tool-box safety meetings; on-the-job discipline; and management commitment. Past research on effective safety performance in construction indicates that the comparative measures, such as the experience modification rate and OSHA incidence rate, are more reliable and objective than the management accountability items.

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Last Modified: February 4, 2008
Please forward all questions about this site to: Michelle Holbrook


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