Workers Compensation Class Coding Made Simple

What is the purpose of class coding?  Helps both the insurer and the insured to assess and evaluate the risk  Provides NCCI with data necessary for experience & exposure analysis (used for Rate Setting)  Aids in setting exposure limits and restrictions

Basic Terminology  Governing Code - the code assigned to the client’s business  Defined by NCCI as the classification at a specific site, other than a standard exception, that produces the greatest amount of payroll

Basic Terminology  Standard Exception - assignments that are so common to most businesses that special classifications have been established for them

Basic Terminology  Standard Exceptions –7380:Drivers, Chauffeurs & Their Helpers NOC – Commercial –8742:Salespersons, Collectors or Messengers – Outside –8810:Clerical Office Employees NOC

Basic Rules  Code the business, NOT the assignment  Find out the following: –Beginning Materials –Process –Finished product

Basic Rules  Determine the assignment  What will your employee be doing?  Is this assignment a Standard Exception?  Is this assignment contemplated by the governing code?  Example: Code 7610 – Radio or TV Broadcasting Station – All employees & clerical, drivers –Do standard exceptions apply to this code?

Seem easy enough? Let’s try to code a few customer requests.

Case 1  My customer has a plant with torches and stuff and they weld metal, cut steel, and stuff like that. The actual product that they produce is the metal dumpsters that the garbage companies use - you know what I’m talking about? Anyway, they want our employee to be a laborer type and help out in the production process. No driving or anything like that. What is the code?

Is the answer: A Metal Goods Manufacturing B Fireproof Equipment Manufacturing C Boilermaking D.None of the above

C. is the correct answer  A Metal Goods Manufacturing  B Fireproof Equipment Manufacturing  C Boilermaking  D. None of the above Note: This is based on NCCI coding. Those states that do not use NCCI may have a different code assignment

Case 2  My customer is a company named Marty’s Meter Readers. This company provides meter reading services to the various utility companies in the area. No dangerous work, maybe a dog bite or something—and most of the time, they don’t even have to drive, someone takes them to the location you know, like a subdivision, and they read the meters and then someone comes to pick them up.

Is the answer: A Salespersons - Outside B Electric Power Company - All employees and drivers C Municipal, Township, County, State employee NOC

Taken from the Premium Audit and Advisory Service:  Classifications Assigned by Analogy – Code 8742  The nature of Code 8742 is that it will usually be characterized as applying to employees engaged in duties away from the employer's premises. The following classifications have been assigned by analogy to Code 8742: –Banks: Special Officers and Armed and Unarmed Attendants, Ushers, Door Attendants, Appraisers, Field Auditors, Runners or Messengers –Claim Adjusters or Special Agents - Insurance Co. –Escort Service –Homemaker Service: Outside Social Case Workers –Meter Readers – Specialty risks performing meter reading for Utility Companies –Newspaper Publishing: Reporters, Photographers, Advertising or Circulation Solicitors…

Still not sure which code to use?  Visit the RCS Website at and log in  On the left side, view the workers comp coding links

In Review  WC Coding is a necessary function in the insurance process  All industries have a governing class code  Unless your employee’s assignment is a standard exception and is not contemplated by the governing code, the governing code will apply Coding assistance is available to RCS Customers through the RCS website at ww.riskcontrolservices.com or by faxing requests to RCS at ww.riskcontrolservices.com