In a paper titled “Alternative funding mechanisms for workers’ compensation: An International comparison,” Klein discussed some of the methods different countries use for covering workplace injuries, and at the very beginning of the discussions he noted, “It is interesting to consider how important values or objectives are prioritized in the design of these systems, such as: equity of funding burdens across employers; adequacy and equity of benefits and adequacy of compensation for injured workers; rehabilitation and return to work; actuarially correct charges for insurance coverage; intergenerational equity in funding system costs; [and] workplace safety” (2006, 4). While the focus and objectives of that treatise were different …show more content…
When looking at solution criteria for the best way of determining workers’ compensation premiums for businesses in the construction industry two almost equally import criteria have to be at the top of the list. Those are reducing the total cost of the workers’ compensation insurance and improving workplace safety. Both must be key criteria for any solution. While it is difficult not to have improving workplace safety as the top criteria for obvious social and humane reasons, reducing the total cost of the workers’ compensation insurance should be the top-ranked criteria. Ultimately, worker safety needs to be a key factor and consideration for any system, but how that is best determined is what requires reducing costs to be the top criteria, as lower costs cannot be achieved in any proposed solution without also improving workplace safety. In one 2006 study that appears to be consistent with …show more content…
His solution uses a computer-based expert system to determine workers’ compensation premiums for construction projects based on three components. The first component is what Imriyas called the risk fee. It is calculated before the start of a project and considers the average construction project claims unit costs, an insurance markup for profit and administrative costs, the total estimated payroll, a hazard index, and a safety index with the latter two specifically developed by Imriyas and implemented through the use of his expert system. His project hazard index evaluates eleven key areas scoring up to six specific traits in each area on a scale of one to five while the project safety index evaluates eight key areas scoring up to thirty-two specific traits in each area on a scale of one to five. An example of a specific trait included in the excavation area of the project hazard index requires rating, on a scale from one to five, the hazard level created by underground utilities near the project (Imriyas, 2007). The other two components consist of a claims control incentive that is given to the contractor on the project and a safety monitoring discount that is given to the project owner; both of these are determined after the