The Most Expensive Classification Code in Texas Involves USL&H
The Most Expensive Classification Code in Texas. I was working on a project for a client that had a large % of their operations in Texas. The Texas Relativity schedules for 2013 (usually known as Classification Codes) indicated that 6874F was the most expensive code. The rate was 16.81 per $100 of payroll.
The 16.81 relativity rate of Texas does not mean this is the charged rate for that state. As I have mentioned often, the advisory rates are usually lower than the actual premium rate charged by insurance carriers.
The class code 6874F has the “F” appended to it. The notation means the classification is considered a USL&H Code. USL&H is the acronym for United States Longshoreman and Harbor Workers. The class code 6874 is Ship Hull Painting.
If one Googles the class code, many of the insurance carriers will not underwrite that class code. The code often appears on the prohibited class code list.
The amount of risk involved would likely be the reason for not underwriting employers with that code. We have found the number of carriers that will underwrite any type of USL&H exposure is limited at best.
Classification code 6872F – Ship Hull Repair is also one of the most expensive class codes. In fact, the advisory rate in New Jersey is actually somewhat higher than 6874F. Janitorial services are actually the highest New Jersey advisory loss cost.
The relativities (loss costs) are set by the rating bureau’s actuaries on a periodic basis – usually yearly. There is great variation from state to state on the advisory loss costs. I used to try to say that a certain class code is the most expensive across-the-board. After many emails from the blog readers, I came to realize there is such a great variation on advisory loss costs from state to state.
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