Your Company’s Work Comp Classification Codes Are Important
Your Work Comp classification codes are very critical to your premiums.
We have received quite a few inquiries over the last few weeks about Classification Codes during premium audits by the insurance carriers. The Classification Codes are not SIC codes. However, there is some correlation between the Classification Codes and the SIC or NAIC codes. Classification codes are often called Class Codes, or NCCI Codes or State Rating Bureau codes.
One of the main red flags to look for in any premium audit by the insurance carrier is that the Classification Codes were changed or new ones were added at audit. This is a true red flag. It may be your best course of action to seek out a specialist in this area such as J&L when this happens. You are likely being overcharged on your premiums in this case.
The premium auditors do not know your business as well as you do. Like most insurance company employees, auditors are under time constraints and pressures. They may not have the time to study your business and to see all of the job functions in detail. As I have said very often, do not blame the individual premium auditor – blame the Workers Comp insurance system as a whole.
If you feel something is wrong – a gut feeling that your workers compensation program may be in error, then that should be considered another type of red flag. I have written many articles and spoke on the subject many times – your gut feeling as a Risk Manager, company owner, or in charge of your insurance – is always the best measure of whether something is amiss or not.
Start asking questions if you think your company has the incorrect work comp classification codes.
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