CHAPTER

culating manual rates, 226. Basic pure premiums, 227.

Law differential, 227. Accident frequency, 230. In-

creasing cost of the act, 232. Industrial diseases, 232.

Catastrophes, 232. Expense, 232. Typical rate calcula-

tion, 235. Criticism of present methods of calculation

236. The future, 237.

XIX. MERIT RATING

Bases for merit rating, 241. Schedule rating, 241.

Definition, 241. The schedule, 242. Types of hazard,

243. Machine-employee ratio, 246. Safety organiza-

tion, inspection service, and education, 248. Use of eye

protectors, etc.; maintenance and inspection, 249. For-

mula rating, 249. Application of the schedule, 249.

Conclusion, 252.

XX. MERIT RATING (Continued)

Experience rating, 253. Definition, 253. Purpose, 253.

Requirements for a scientific plan of experience rating,

254. The New York plan, 255. Calculation of loss

ratio, 255. Neutral zone, 257. Maximum debits and

credits, 257. Computation of actual debits and credits,

258. Schedule rated risks, 259. Application of the

plan, 259. Other plans, 259. Proposed plans, 260.

Summary of arguments pro and con, 261. Conclusion,

262.

XXI. RESERVES.

Unearned premium reserve, 265. Method of calcula-

tion, 266. Loss reserves, 267. Definition and purpose,

267. Desiderata, 268. Difficulties, 269. Methods of

calculation, 270.
Present law, 272. Defects of the

present law, 275. Proposed law, 275. Other methods

used, 278.

XXII. INSURANCE OF THE CATASTROPHE HAZARD.

Limits, 282. Accumulation of catastrophe reserves,

282. Reinsurance, 283. Workmen's compensation, 284.

PAGE

240

253

265

280

APPENDICES

PAGE

A. THE NEW YORK WORK MEN'S COMPENSATION LAW

B. FORM OF WORKMEN'S COMPENSATION AND EMPLOYERS'

LIABILITY POLICY CONTRACT COVERING A TYPICAL

MANUFACTURING RISK

289

361

381

PART I

INDUSTRIAL ACCIDENTS AND THEIR

PREVENTION

1

CHAPTER I

INDUSTRIAL ACCIDENTS

Industrial accidents, those accidents occurring to an employee during his working hours, create the problems of which the systems of Employers' Liability and Workmen's Compensation are attempted solutions.

The Extent of Industrial Accidents.-It has been estimated by Dr. Frederick L. Hoffman that there occurred in the United States, during the year 1913, 700,000 industrial accidents, involving a disability period of over four weeks and 25,000 which terminated fatally. In the metal and miscellaneous mineral mines of the United States the statistics of accidents for the year 1913 are as follows: 2

The mining industry is of an extremely hazardous nature and the accident frequency among its employees

1Industrial Accident Statistics, p. 6.

2U. S. Bureau of Mines, Technical Paper 94, p. 27.