Trying to look up workers’ compensation rates by classification code?
With hundreds of different classification codes, finding the right one can be challenging. Here’s the quickest way to find the correct code.
But first: Every business is assigned one or more classification codes. Every classification code is assigned a rate, either by the state rating bureau or by each insurance carrier. This ensures that every business (in the same state) with that class code receives the same base rate.
Now, let’s turn our attention to how to look up classification codes for your business.
🚨 Shortcut: The fastest way to get the correct classification code for workers' comp is to request a real (no obligation) quote. 🚨
Here's a summary of how to determine workers' comp codes:
Below we explain each of these steps in depth. But first, what are workers' compensation codes?
In the United States, several organizations categorize businesses and assign similar businesses a number, or classification code. This group also collects data (like workplace injury rates and costs) nationwide and applies this data to these codes.
Insurance companies then use these codes to assign a fair rate to different business types, based on their likelihood to have a claim. It's similar to how flashy sports cars might pay higher car insurance premiums than typical sedans. Except with workers' compensation insurance, insurance carriers are looking at how dangerous the work is, overall, and how likely an employee is to be injured on the job.
One system, developed by the National Council on Compensation Insurance (NCCI), categorizes businesses for workers' compensation and is the most commonly used system in the U.S. Again, this is all about making sure workers' comp is fair and evenly applied across different types of businesses.
Here's how it works. Looking at the code "9014 Janitorial Services by Contractors—No Window Cleaning Above Ground Level & Drivers." The '9' at the start gives us a broad category of business, and the '014' gets more specific about the kind of work within that category. This hierarchy is used to group and categorize different business types.
The NCCI has over 700 of these codes, though the exact number can change as businesses evolve. This system helps ensure everyone's on the same page when it comes to workers' comp. And as we explain further below, some U.S. states use different classification codes other than those provided by NCCI.
If you have (or had) workers’ compensation insurance, stop what you’re doing and find your certificate of insurance. It’s here that you’ll find the class codes assigned to your business.
Classification codes are usually a 3- or 4-digit number followed by a brief description of the business type. For example:
Review your policy at least once a year for accuracy and to ensure that you’re not overpaying for coverage. In particular:
You may be surprised at what can change over the course of a year.
The first thing to remember is that it doesn’t matter how you find a classification code. What matters is that you find and select the correct one.
This varies by state with most using the National Council on Compensation Insurance (NCCI) for codes and rates. There are a handful of states that don’t use the NCCI, including:
The National Council on Compensation Insurance (NCCI) system is used for workers' compensation insurance purposes. It classifies businesses according to the type of work they do, so that insurance companies can accurately gauge risk levels and determine premiums.
Examples:
You may also have heard of SIC codes or NAICS codes, which are also used to categorize businesses in the United States. However, NCCI is the only one of these that is specifically used for workers' compensation.
In other words, NAICS or SIC codes can help you identify the correct classification for your business, but you likely need to convert it to the correct NCCI code (or whichever classification system your state uses) when buying workers' compensation insurance.
Many companies — even those with only a handful of employees — have more than one class code. However, every business has a primary code. This is called the governing class code, and it represents the overall product or service offered by your company.
Once you know who sets class codes and rates in your state, you can choose to proceed in one of three ways:
To choose the right code, start by answering questions such as:
With each answer, you move closer to pinning down the proper class code for each employee.
If you’re struggling to find your governing class code, here are some tips that can help:
Ideally, review a list of relevant class codes and narrow down the list based on these questions.
Here's an example of what this might look like:
Harrison has owned a carpentry business in California for three years, but just hired his first employee. Because of the strict workers' compensation requirements in California (which state that all employees must be covered by insurance), he's shopping for workers' compensation insurance.
Realizing he doesn't have an existing policy to reference for his NCCI code, Harrison starts his research from scratch. He first checks online to determine whether California uses the NCCI system for workers' compensation.
To his surprise, he finds out that California is among the handful of independent bureau states that use their own classification system instead of NCCI. But, California's system closely mirrors the NCCI, so the information he finds will still be helpful.
Having verified this, he browses through WorkCompOne's blog post "Classification Codes Lookup: 120+ Common Ones." He notices a few that mention carpentry, including:
Taking a moment, Harrison thinks about the work he does. He runs a small shop that primarily focuses on crafting beautiful, bespoke cabinetry for local homes. He's never worked on commercial carpentry or on towering residential projects, so code 5403 doesn't apply.
But the second code, 5437, seems like a perfect fit for his operations.
Still, Harrison knows it's essential to get this right. As a double-check, he decides to call the Workers' Compensation Insurance Rating Bureau of California (WCIRB) for direct advice. Over the phone, they confirm that 5437 is the most suitable code for his business type.
With the correct NCCI equivalent code in hand, Harrison is ready to secure his first workers' compensation insurance policy. He feels a sense of relief, knowing he's taken the necessary steps to protect his business and his new employee.
Some businesses have other workers beyond their core business. A painting business might have an office manager. A catering company might have a salesperson. A restaurant might have a delivery driver. A construction company might have a part-time bookkeeper.
The two most common supporting class codes are:
For most businesses, that also means savings: These supporting roles are often office-based, lower risk and therefore less expensive to insure.
Even with a variety of tools and answers to the above questions, you may still require professional assistance. This is preferred to choosing the wrong classification code and paying the price for it in the end.
At WorkCompOne, we’re here to efficiently move you through the process one step at a time. Not only can we answer your questions and address your concerns, but you can receive an actual quote that you can take action on when the time comes. Get started today by requesting a quote:
Editor's note: This blog post was originally published in June 2022, and was updated in June 2023 for accuracy and comprehensiveness.
