What Is an SIC Code in Workers’ Compensation in Florida?
Standard Industrial Classification (SIC) codes are used to identify industry areas in the United States. Industries are assigned four-digit codes that distinguish them based on characteristics shared between the companies that are assigned the code. These codes are used in various methods of business analysis and workers’ compensation policies. If you have a business that requires workers’ compensation insurance for your employees, it can be helpful to understand how SIC codes are applied. Continue reading to learn more about what SIC codes are, the role they play in workers’ compensation insurance, and how Florida workers’ compensation brokers NPN Brokers can help you find a policy that works for you and your company.
Understanding SIC Codes for Workers’ Compensation Insurance in Florida
SIC codes are used by government agencies to classify industries. They are always four digits long and are assigned to industries that share characteristics based on the products or services they offer. SIC codes are used by insurance companies that offer workers’ compensation insurance, as well as agencies such as the U.S. Census Bureau, the IRS, the Social Security Administration, and the Bureau of Labor Statistics.
In the United States, the National Council on Compensation Insurance collects data pertaining to workplace injuries and determines the prices of workers’ compensation insurance in Florida. The NCCI is an independent “advisory organization” that not only collects data on workers’ compensation policies around the country but also does cost analyses on legislation and regulatory decisions regarding workers’ compensation insurance, analyses on industry trends, and research on injury liability; they also publish materials that inform employers about the industrial classification system that is used in Florida.
How the NCCI Uses SIC Codes
The NCCI uses SIC class codes to classify various industries. The class codes used by the NCCI are connected to workers’ comp insurance rates and represent the level of risk of a workplace accident in various fields. Jobs that are riskier carry higher rates for insurance; for example, jobs that take place in an office carry much lower rates for workers’ compensation insurance than jobs in the construction industry or other fields that have a high likelihood of accidents.
The NCCI gives recommendations for class codes to the offices that regulate workers’ compensation insurance rates in each state, including Florida’s Office of Insurance Regulation – codes which are then used by insurance carriers.
Common Class Codes in Florida
Overall, there are over 600 class codes for various industries. The following class codes correspond to some of the top industries in Florida:
- 0113 – Farm: Fish Hatchery
- 3507 – Construction or Agricultural Machinery Manufacturing
- 5223 – Swimming Pool Construction (Not Iron or Steel)
- 5348 – Stone, Mosaic or Terrazzo or Ceramic Tile Work (Inside)
- 5506 – Street or Road Construction: Paving or Repaving
- 5551 – Roofing
- 5606 – Contractor (Construction Supervisor)
- 6400 – Metal Fence Construction
- 8209 – Vegetable Packing
- 8380 – Auto Service/Repair Center
- 9052 – Hotel: Restaurant Employees
- 9083 – Fast Food Restaurant
How Workers’ Comp Policies are Priced
A few factors go into the prices of workers’ compensation policies. One major factor in the price of a workers’ comp policy is the manual premium. This is the price associated with each type of industry, which corresponds with the class code; it is calculated based on employees’ pay. This manual premium is then multiplied by a company’s experience modification factor.
The experience modification factor (also known as an “X-mod”) expresses whether an employee’s level of risk of injury on the job is higher or lower than average. Companies can expect higher experience modification factors if they have filed multiple workers’ compensation claims in the past or have only existed for a few years.
Some employers qualify for credits that can lower their insurance rates, such as the Safety Credit and the Drug-Free Credit. Other adjustments are often made after the company’s experience modification factor and manual premium are taken into account; the resulting number is the Total Estimated Annual Premium, which is the rate that is given to employers when they request a quote on a policy.
As an employer continues to pay for their policy, their insurance provider will check to make sure that the policy is proportional to their payroll. There are incentives available to employers that effectively control losses.
Get a Quote on a Florida Workers’ Compensation Policy Today
Almost all companies in Florida are required to have workers’ compensation policies for employees. The penalties for not having workers’ compensation insurance if your company meets the requirements include major fines and the issuance of a stop-work order. Companies that don’t have workers’ compensation policies for employees also make themselves susceptible to lawsuits from employees.
The best thing that Florida employers can do to protect themselves against severe penalties is to get a workers’ compensation policy as soon as possible. If you are a company based in Florida that is interested in getting a quote on a workers’ compensation policy, visit the NPN Brokers website. You can enter some basic information about your company and get a workers’ comp quote in minutes.
Contact NPN Brokers for a Workers’ Compensation Policy Information
SIC codes play an important role in determining the price of workers’ compensation policies in Florida. Companies that work in Florida should know that NPN Brokers are available to help them find affordable and comprehensive policies. Visit our website or call us at (866) 340-9120 to learn more about how we can help you find the right policy for your Florida company.