Workers Comp Class Codes
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Workers Compensation Class Codes
A lot of employers have polices with incorrect class codes, costing them hundreds or thousands of dollars more in premium each year.
Questions? Call 888.611.7467 for a Workers Comp Class Code Review
NCCI Class Codes from NCCI Scopes Manual
NCCI Class Codes
One of the primary components of pricing workers' compensation insurance is classifying a risk or workplace exposure within the proper NCCI workers comp class code. Incorrect risk classification by insurance agents and/or underwriters often results in premium that is higher or lower than it should be. Sometimes payroll is reclassified at the time of audit which often creates a large workers comp audit balance or a credit.
In most states, the classification system used is one devised and maintained by NCCI, the National Council on Compensation Insurance. NCCI is an independent advisory organization largely funded by the insurance companies who utilize their statistical data for rating. NCCI's function is to develop and provide the statistical data used to set manual rates (by state) for workers compensation pricing and to assign each employers' annual experience modification rate based on a ratio of claims frequency and cost of premium paid.
Non NCCI Jurisdiction States
There are a few states that do not use the NCCI classification system. California, New Jersey, New York, Delaware, and Pennsylvania utilize their own classification systems. Texas licenses much of the NCCI system, but makes significant variations in specific classification rules. Many other states have some "state special" classifications that may vary significantly from NCCI standard definitions for certain workplace classification codes. To learn more about class codes under NCCI's jurisdiction visit our state workers compensation directory.
NCCI Scopes and Workers Compensation Classifications
Each classification code is comprised of a group of employers with a similar exposure, or type of hazard. A basic classification code denotes a particular type of job duty or business. Therefore, a class code is the systematic arranging of properties, persons, or business operations into groups or categories according to certain criteria. This arrangement is done to create a basis for establishing statistical experience and determining workers compensation rates, and to avoid unfair discrimination by insurance companies. The essential concept of "fair discrimination" is that each risk should bear its fair share of the overall cost of expenses and losses in relationship to its own relevant expenses and hazards.
A Scopes class code is the identifying number for an occupational
classification. It is a three-digit or four-digit numeric code assigned
to a specific occupation of workers. The code is based on the nature of
the work for the employer. It is common for most employers to have
two or more class codes on their policy.
For example: Class code 8810 is for a clerical exposure and class code
5645 is for a general residential construction exposure. A
contractor might have laborers working under class code 5645 and an
office person rated under the clerical code.
Classification Codes and Statistical Codes for Workers Compensation and Employers Liability Insurance (Scopes Manual)
The Scopes Manual is the industry standard workers compensation class code book containing numerical classification codes and the classification phraseology for each code used in classifying workers' compensation risks, including state special codes. The NCCI Scopes Manual is available for purchase from NCCI.
List of Workers Compensation Class Codes
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