Your Workers Comp Policy Rules For Changing Classification Codes
Your Workers Comp policy rules have an interesting yet unknown rule in them. All states have this rule in one form or another. The main rule here is the 120 day rule. The rule is applicable in almost all states with very few exceptions.
- If the Workers Comp insurance carrier changes your classification during the first 120 days, this is allowed.
- If your carrier does this after 120 days, but before 9 months, then any increase is on a pro-rata %, not 100% of the classification code change.
- If there is a change in classification codes after nine months, then THERE CAN BE NO RETROACTIVE CHANGE to the current workers compensation policy. The classification codes can only be changed on the renewal policy.
This rule was instituted due to insurance carriers going back and changing the classification codes on policies to generate more funds. Before the 120 day rule, carriers could change policies at will. If you have had a retroactive or current classification code change, it may be best to contact a Workers Comp premium and Experience Mod expert .
Next Up – Ownership Changes and The Effect on a Workers Comp Policy
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