The Experience Rating Plan as Applied to Workmen's Compensation Risks

In the early days of compensation insurance it was quickly recognized that the average manual rate would not in general reflect the proper measure of hazard for an individual risk having a substantial exposure. In order to decrease the loss frequency and severity by eliminating certain causes of accidents, engineers made an extensive study of the manufacturing industries and developed the so-called "Industry Schedule" or a system of credits and charges, depending upon the physical condition of the plant. (I) This system of schedule rating was intended to encourage the employers to install safety devices on their machines and to maintain the plant in a condition which would make it less likely for an accident to occur and reduce the severity of unavoidable accidents.