How Do I Know that My Company is Classified Correctly in Workers’ Compensation Insurance?

As an employer, it’s important to know your company’s classification code for Workers’ Compensation insurance. So, what’s yours, and what might your classification code mean for your premiums?

Classification codes define companies and their practices for Workers’ Compensation insurance purposes. Depending on your state and its classification system, you might have to contact different agencies to determine your classification. Our brokers can streamline that process by assessing your company’s practices and comparing them to the classification system of your state to ensure that it is classified correctly. Depending on your classification code, it might be more challenging for you to find affordable insurance. However, when you partner with the right brokers, you can get comprehensive Workers’ Compensation insurance that doesn’t break the bank, regardless of your company’s classification.

At NPN Brokers, we help companies get the Workers’ Compensation insurance they need to stay protected. To learn more about the Workers’ Compensation insurance brokers at NPN Brokers, call today at (561) 990-3022.

What Are Company Classifications for Workers’ Compensation Insurance?

Though each state may have its own rules for classifying companies for Workers’ Compensation insurance, all have some form of a classification system. Understanding your company’s correct classification is important so that you get the necessary coverage in case of a workplace injury.

Most, but not all, states refer to guidance from the National Council on Compensation Insurance (NCCI) to classify companies within their state for Workers’ Compensation insurance purposes. Some states have bureaus or agencies that determine classification based on their own set of criteria.

Regardless of the specific classification system used, all serve a similar purpose: to correctly define and classify companies based on their operations. Generally, these classification systems start by assigning companies to an industry, like construction or agriculture. Then, companies are further classified based on the specific type of work they do. Companies are then given a classification code, a number, that helps small business Workers’ Compensation insurance carriers evaluate premiums and understand the risks of insuring certain companies.

Company classifications can inform many things regarding Workers’ Compensation insurance, most notably the cost and whether or not a company is required to have insurance. The NCCI and individual state bureaus might change these classifications periodically for various reasons. If your company recently changed its operations, it may no longer be classified correctly. Learning how your state classifies companies for Workers’ Compensation insurance is crucial so that you get the insurance you need.

What is My Company’s Correct Classification for Workers’ Compensation Insurance?

Figuring out your company’s classification code might be challenging, depending on your state and its methods for classifying businesses. Our Workers’ Compensation insurance brokers can assess your company’s practices to help determine its correct classification code.

Breaking down a company’s operations so that you can identify its classification code can be difficult. Reading the NCCI’s listing of classification codes and corresponding ratings can be complicated, especially for those unfamiliar with Workers’ Compensation insurance. Our brokers can use their experience and insight to compare your company’s operations with the NCCI’s classification codes.

The same goes for state-specific classification systems. Remember, not all states use the NCCI as a reference to determine how they classify companies for Workers’ Compensation insurance purposes. If your state’s classification guidance is difficult to understand, turn to our brokers for guidance.

Suppose your company recently changed directions and has pivoted to a different type of work. In that case, its Workers’ Compensation classification code has likely changed. These classifications are specific, not all-encompassing. If that’s the case for you, be sure to contact our brokers to learn your company’s new, correct Workers’ Compensation classification code.

How Can My Company’s Classification for Workers’ Compensation Insurance Affect Premiums?

Understanding your company’s Workers’ Compensation classification code is crucial for various reasons. However, one of the most important reasons is to learn where you stand regarding potential premiums. Many Workers’ Compensation insurance carriers use classification codes to help determine the cost of coverage.

Your company’s classification code informs Workers’ Compensation insurance carriers of its risk to insure. Each code has a corresponding rating, which carriers might include in the equation when calculating premiums. The higher the rating attached to your classification, the more expensive Workers’ Compensation insurance might be.

That said, classification codes and ratings shouldn’t be the only factors considered when determining the price of premiums. So, don’t accept expensive coverage because you have a certain company classification. Instead, reach out to our brokers to learn your options for coverage, regardless of your Workers’ Compensation classification.

Getting Workers’ Compensation Insurance Despite Your Company’s Classification

Because Workers’ Compensation classification codes might impact the cost of coverage, employers might worry about expensive premiums and forego insurance altogether. This is never wise, as a lack of Workers’ Compensation insurance might make you financially liable for an employee’s losses if injured on the job. If your classification makes finding coverage difficult, turn to our Workers’ Compensation insurance brokers.

Classification codes inform Workers’ Compensation insurance carriers of risk but lack other information about individual companies that can ultimately lower the cost of coverage. In reality, all companies should have Workers’ Compensation insurance, regardless of whether or not they’re required to in their state. Insurance benefits employees and employers alike and is essential protection in the event of a workplace injury. If your previous carrier incorrectly classified your company and unfairly priced its premiums based on that classification, it may be time to find different insurance.

Our brokers have relationships with carriers that offer affordable, transparent Workers’ Compensation insurance policies to a wide variety of businesses, including those with high-risk classification codes. Regardless of your classification code, you can find insurance that doesn’t require audits, contracts, or deposits when you partner with our Workers’ Compensation insurance brokers.

Call Our Brokers and Get Workers’ Compensation Insurance Today

If you need to learn your company’s classification and get Workers’ Compensation insurance, our brokers can help. To learn more about the Workers’ Compensation insurance brokers at NPN Brokers, call today at (561) 990-3022.