Workers Compensation Class Codes

Many Employers have polices with incorrect class codes costing them hundreds or thousands of dollars more in premium for their workers compensation coverage.

Workers compensation classifications

What is a Workers Comp classification code?

A class code is a four digit code assigned by NCCI in order to differentiate between the various job duties or scope of work performed by employees.  This classification system contains over 700 unique codes and is the basis for underwriting and pricing workers compensation coverage.

NCCI Class Codes

One of the primary components of pricing workers' compensation insurance is classifying a risk or workplace exposure within the proper NCCI work comp class code. Incorrect risk classification by insurance agents and/or underwriters often results in premium that is too high, or conversely, lower premium that is reclassified at the time of audit creating a large audit bill due.
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 analysis data. NCCI's function is to develop and provide the statistical data used to set manual rates for workers compensation and to develop individual employers' experience mod's based on a ratio of claims to premium paid.

Non NCCI Jurisdiction States

There are a few states that do not use the NCCI classification system. California, New Jersey, New York, Delaware, and Pennsylvania are states that have 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 can vary significantly from NCCI definitions for certain workplace exposures. To see which states are NCCI jurisdictions and which have independent rating bureaus, consult our state-by-state directory.

NCCI Scopes Manual

A scopes classification is comprised of a group of employers with similar exposure to a type of hazard. A basic classification denotes a particular type of business. 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 rates, and to avoid unfair discrimination. 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 an occupational classification. It is a four-digit numeric code assigned to a specific occupation of workers. The code is based on the nature of the business of the employer.
For example: Class code 8810 is for a clerical exposure and class code 5645 is for a general residential construction exposure.
Classification Codes and Statistical Codes for Workers Compensation and Employers Liability Insurance (Scopes Manual).
The Scopes Manual is a code book containing four-digit numerical classification codes and the classification phraseology for each code used in classifying workers' compensation risks, including state specials, etc.

Workers Compensation Information

What is Workers Compensation

The Basics of Workers Compensation

Workers Compensation Laws

Workers Compensation Claims

Workers Compensation Benefits

Workers Comp Classification Codes

Workers Compensation Mod

State Fund Workers Compensation

Workers Compensation Forms

Workers Comp Audit Information

Workers Compensation Commission

Workers Comp Information by State

Workers Comp and Employer Liability

Workers Compensation Exclusions- Owners and Officers

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