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Breaking the ‘Code’ in Workers’ Compensation

Pay special attention to the employee code(s) you select when setting your Workers’ Compensation insurance.  Your code(s) will impact the insurance premium you pay and whether future claims are handled smoothly.

Classification codes are the creation of the National Council for Compensation Insurance (NCCI.)  Since different jobs have different injury risk factors, varying class codes have been assigned to hundreds of job descriptions.  

We’ll compare a roofer (class code 5551) and an office receptionist (class code 8810) to explain.  Insurance companies are much more likely to be paying injury claims for a roofer than a receptionist, and the injuries a roofer sustains are often more serious than those of a receptionist.   

The more dangerous the job, the higher the insurance rate.

The rate for a roofer might be 22% of payroll placed in code 5551 (or $22 per $100 of payroll.)  The rate for a receptionist might be .23% placed in code 8810 (or $.23 per $100 of payroll).

With so many different codes, it is very important to have accurate employee job descriptions when obtaining a Workers’ Compensation policy.  The difference between a roofer and a receptionist is easy to recognize, but what about a roofer and a construction worker?   The risk is much higher for an employee who’s working on a 10-story office building than a single-story residential building, so there are dozens of construction codes from which you’ll select.

The more information that’s available when a policy is written, the more accurate codes and rates will be.  Also, with better accuracy, there will be fewer unpleasant surprises at audit time.

If you have questions about the classification codes on your Workers’ Compensation policy, sign up now for a free consultation.

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