What is Workers’ Comp Code 5701 Used For?
When it comes to workers’ compensation insurance, understanding classification codes is essential for ensuring businesses are properly covered while keeping costs manageable. One of the most frequently used codes in high-risk industries is workers’ comp class code 5701, which applies primarily to businesses involved in wrecking or demolition work. This classification plays a crucial role in determining workers’ compensation insurance rates for demolition companies and similar businesses.
If your business falls under workers’ comp code 5701, securing the right coverage is essential to protect your employees and stay compliant with state laws. NPN Brokers can help you obtain workers’ comp insurance for demolition companies quickly and affordably. Call us today at (561) 990-3022 or request a quote online.
Understanding Workers’ Comp Class Code 5701
Workers’ compensation class codes are numerical designations assigned by the National Council on Compensation Insurance (NCCI) or state-specific rating bureaus to categorize different types of work based on risk levels. Workers’ comp class code 5701 specifically applies to businesses involved in wrecking, demolition, dismantling, or razing of structures.
Since demolition work involves significant hazards such as falling debris, heavy machinery operation, and structural collapses, this classification is considered high-risk. As a result, companies classified under this code typically face higher workers’ compensation insurance premiums than businesses in lower-risk industries.
What Businesses Does Workers’ Comp Code 5701 Apply To?
Businesses classified under workers’ comp class code 5701 include those engaged in:
- Demolition of buildings or structures – This includes both interior and exterior demolition work, partial or total structure removal, and controlled demolition projects.
- Dismantling or wrecking of industrial equipment – Companies that take apart factories, refineries, or mechanical systems often fall under this classification.
- Concrete and structural removal – Breaking up concrete foundations, walls, or floors as part of a demolition project is included in this classification.
- Deconstruction and salvage operations – Companies that carefully dismantle buildings to salvage materials for reuse are often categorized under code 5701.
Since these tasks involve high levels of physical labor, heavy equipment use, and exposure to hazardous conditions, insurance providers consider this classification among the higher-risk categories for workplace injuries.
Why is Workers’ Comp for Demolition Companies Essential?
Workers’ comp for demolition companies is essential due to the inherent dangers involved in the job. Workers often encounter risks such as:
- Falls from heights, especially when demolishing multi-story buildings
- Being struck by falling debris
- Injuries from operating heavy machinery such as excavators, wrecking balls, and jackhammers
- Exposure to hazardous materials such as asbestos, lead, or mold
- Structural collapses, which can cause serious or fatal injuries
Because of these risks, workers’ comp insurance for demolition companies is often more expensive than for other industries. However, having the right coverage is crucial for both legal compliance and financial protection.
Legal Requirements for Demolition Companies
Most states require businesses classified under workers’ comp class code 5701 to carry workers’ compensation insurance if they have employees. Failure to comply with state laws can result in fines, penalties, or even business license suspension.
Workers’ compensation insurance provides coverage for:
- Medical expenses for work-related injuries
- Lost wages if an employee is unable to work due to injury
- Rehabilitation costs for injured workers returning to the job
- Death benefits for families of workers who suffer fatal accidents
Without proper coverage, demolition companies risk significant financial losses due to potential lawsuits or injury claims.
How Workers’ Comp Insurance Rates Are Determined for Demolition Companies
Factors That Affect Workers’ Comp Premiums
Insurance providers calculate workers’ compensation premiums based on several factors, including:
- Industry classification code – Since workers’ comp class code 5701 is a high-risk classification, premiums are generally higher.
- Payroll size – Workers’ comp premiums are often calculated based on payroll, meaning higher payrolls result in higher premiums.
- Claims history – A history of frequent or severe claims can increase insurance costs.
- Safety measures and compliance – Companies that implement strong workplace safety programs may qualify for lower rates.
Ways to Reduce Workers’ Comp Insurance Costs
To keep insurance costs manageable, demolition companies can:
- Implement safety training programs to reduce the likelihood of workplace injuries
- Ensure proper protective gear and equipment are used at all job sites
- Maintain a strong safety record to qualify for lower premiums over time
- Work with a specialized workers’ comp broker like NPN Brokers to find flexible, affordable coverage options
Get Workers’ Comp Insurance for Demolition Companies Fast
If your business falls under workers’ comp class code 5701, finding the right insurance coverage is crucial. At NPN Brokers, we specialize in securing workers’ comp for demolition companies, offering flexible options with no contracts, no deposits, and no audits.
Whether you need coverage for a single demolition project or long-term protection for your team, we can provide a quick quote and coverage in as little as 24 hours. Call us today at (561) 990-3022 or fill out our online quote request form to get started.
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