Workers Compensation Class Codes
NCCI Class Codes and Workers CompOne of the primary components of pricing workers' compensation insurance is classifying a risk or workplace exposure within the proper NCCI workers compensation class code. Incorrect risk classifications 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 compensation audit balance or a credit.Each classification code is comprised of a group of employers with a similar exposures, or types of hazards. A basic classification code denotes a particular type of job duty within a 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 each 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 and employee. It is common for most employers to have two or more class codes on their policy.
Content
for
Workers
Compensation
Class
Codes?
View
Work
Comp
Classification
codes
at
http://classcodes.net/
NCCI
Class
Codes
and
Workers
Comp
One
of
the
primary
components
of
pricing
workers'
compensation
insurance
is
classifying
a
risk
or
workplace
exposure
within
the
proper
NCCI
workers
compensation
class
code.
Incorrect
risk
classifications
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
compensation
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,
which
is
based
on
a
ratio
of
claims
frequency
and
cost
of
premium
paid.
NCCI
Scopes
and
Workers'
Comp
Classifications
Each
classification
code
is
comprised
of
a
group
of
employers
with
a
similar
exposures,
or
types
of
hazards.
A
basic
classification
code
denotes
a
particular
type
of
job
duty
within
a
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
each
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
and
employee.
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.
Non
NCCI
Jurisdiction
States
and
Classifications
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.
