Workers Compensation Classification Codes Are Critical

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 auditor - blame the Workers Comp insurance system as a whole.