Accident Causation and Investigation: Acme Construction
Accident Causation and Investigation
Prepare a project report using the attached Unit VI Consulting Report template for your project, and complete the template based on the following information:
Part I: List the five most significant financial benefits for an organization to invest in a safety system or program.
Part II: Acme Construction is due for a workers’ compensation premium review and you have been asked to estimate the potential premiums for the coming year. You have 10 masonry employees (classification—5022) with a rate of $7.96; four plumbers (classification—5183) with a rate of $3.86); and two electricians (classification—5190) with a rate of $4.32. The total payroll for the three classifications are as follows:
5022 masonry $416,000 (total annual payroll)
5183 plumbers $208,000 (total annual payroll)
5190 electricians $145,600 (total annual payroll)
The previous experience modification rate (EMR) was 1.0 because the company had only been in business for 3 years and the EMR is based on a 3-year rolling average. In those previous 3 years, your company had zero claims and you can anticipate that your company will have a reduction in the EMR to at least 0.90. However, you have not received notification of this new EMR, so base your overall premium calculations on an EMR of 1.0
Part III: Using the results from the 1.0 EMR premium estimate, calculate the rate to one of a 0.9 EMR and then a EMR 1.25 rating. Compare both of them to the previous EMR of 1.0 and show in a table as was depicted in the unit lesson.
Part IV: Provide a summary of the energy release theory of accident causation.
Part V: Explain the near-miss relationship as referenced in Figure 20.7 of your textbook in your own words.
Ensure you address all parts of the template. Your project should be at least three pages in length using the above template. Make sure you show your equations and all work for determining answers for Parts II and Parts III in the project template.
No references are required for this assignment; however, if outside sources are used, please adhere to APA Style when creating citations and references for this assignment.
Accident Causation and Investigation Report
Student Name
University
Course Name
Instructor Name
Date
2
Executive Summary
The project report will outline the five most significant financial benefits for an organization to invest in a safety system. It will also calculate the potential premiums for Acme Construction’s coming year using its previous EMR OF 1.0. The report will compare the premium with the premium calculations using an EMR of 0.9 and 1.25. Afterward, it will summarize the energy release theory of accident causation and explain the near-miss relationship illustrated in the textbook.
3
Background
On _23rd February 2023_ (date), Student Name was asked to perform the following services:
(a) List the five most significant financial benefits for an organization to invest in a safety program
(b) Calculate Acme Construction’s workers’ compensation premium with an EMR of 1.0
(c) Calculate Acme Construction’s workers’ compensation premium with EMRs of 0.9 and 1.25 and compare to the previous results
(d) Provide a summary of the energy release theory of accident causation
(e) Explain the near-miss relationship referenced in Figure 20.7 of the textbook
Do not write the report in the first person. (No use of words such as I, we, our, etc.)
Part I
The five most significant financial benefits for an organization to invest in a safety system or program are lower insurance premiums, fewer self-pay claims, higher productivity, lower Occupational Safety and Health Administration (OSHA) citations, and higher access to job contractors. Investing in a safety system or program translates to fewer injuries and claims and lower insurance premiums. Companies with a safety program also have fewer ancillary claims, which translates to self-pay claims savings. Injuries also take critical time away from the job; therefore, a safe working environment directly boosts overall productivity. Moreover, a safety system or program decreases OSHA citations and reduces a company’s exposure to hefty fines. More importantly, companies with a good safety reputation have access to specific jobs that would not have been otherwise available. Some contracts require companies to have a safety program to qualify to bid for specific jobs.
Part II
Acme Construction wants to review its workers’ compensation premium for its four masonry employees (class code – 5022, with a rate of $7.96), four plumbers (class code – 5183, with a rate of $3.86), and two electricians (class code – 5190, with a rate of $4.32). The annual payrolls for masonry, plumbers, and electricians are $416,000, $208,000, and $145,600, respectively. While the business has recorded zero claims over the past 3-years and is expected to have a reduction in the Experience Modification Rate (EMR) to at least 0.90, the company will calculate its overall premium calculations using an EMR of 1.0. The formula for calculating insurance premiums is as follows:
Premium = Class Code × (Total Payroll [for class]/$100) × EMR.
The insurance premiums for the four masonry employees is $33,113.60/year
The insurance premium for the four plumbers is $8,028.80/per year
The insurance premiums for the two electricians is $6,289.92/year
Part III
The company’s overall premium calculations on an EMR of 0.9 employs the same formula: Premium = Class Code × (Total Payroll [for class]/$100) × EMR.
The insurance premiums for the four masonry employees is $29,802.24/year
The insurance premium for the four plumbers is $7,225.92/per year
The insurance premium for the two electricians is $5,660.93/per year
The ...