Incidence Rate

What Does Incidence Rate Mean?

An incidence rate (also referred to as an accident rate) is a measure of workplace safety. It helps companies assess whether their implemented safety programs are effective. The rate is calculated by considering the number of accidents that occur within a specific time period.

Insuranceopedia Explains Incidence Rate

The incidence rate indicates the safety of working conditions and provides companies with insights on whether their safety measures need improvement or updating.

The Occupational Safety and Health Administration (OSHA), the federal agency responsible for setting workplace safety regulations, provides a formula for calculating incidence rates. To calculate the accident rate in a workplace, multiply the number of accidents by 200,000 and then divide the result by the total number of labor hours.

Incidence rates are important to insurers, as they can be used to determine the premium for accident insurance. A higher incidence rate signals more frequent claims and pushes up the cost of workers’ compensation insurance for the employer. Tracking this figure year over year helps a business understand how business insurance premiums are calculated and where safety investments might lower the next renewal.