Workers compensation insurance is required for businesses who have more than one employee and even one employee and more when the business is related to construction. If you talk about workers compensation insurance premiums, the pricing is not the same across businesses. The use of workers comp codes is helpful in figuring out what pricing of workers compensation insurance premiums must be followed. The code system made by the NCCI or National Council on Compensation Insurance is what most states follow. This coding system enables the classification of exposure and risks for a business. This thus helps companies better gauge how much they should be paying their worker’s compensation insurance premiums. Nonetheless, the use of the NCCI classification code is not applied by the states of New York, California, New Jersey, Pennsylvania, and Delaware. Despite the fact that this system is also used by Texas, they have particular deviations in the rules of classification.
What you need to know about the NCCI is that it is an independent organization that is run for profit. In the process of determining the insurance premiums for workers compensation for companies, a lot of insurance companies rely on the statistical data produced by the NCCI. The process of determining the correct worker’s comp codes for a business is not easy. It is very common for businesses to use the wrong classification whether or not they have assigned the classification. If there is incorrection classification, the business might be getting premiums for their insurance that is either too low or too high. Upon expiration of the policy, your company might suffer from large bills after the audit is done.
Using the NCCI information is not for free and not just obtained anywhere on the net. Because the organization is run for profit, they sell a manual with their proprietary information.
One thing that you need to know about the use of workers comp codes is that they look at your business as a whole. Simply put, they will not be minding the individual jobs that form part of your business. Even if you have clerical workers in your pharmaceutical business, this means that you will not be classified under the code for clerical exposure but under the code for pharmaceutical exposure. For construction businesses, however, there is an exception. For construction businesses, though, you can have as many code classifications as necessary for an individual employee. For each workers compensation code class, you can qualify by providing the hours for each.
Once again, there are a lot of challenges to figuring out the comp code applicable to your worker’s compensation insurance. Fortunately, you can rely on consultants who can help you review and modify the codes that best apply to your business. By using the right workers comp codes, you can save thousands of your money and avoid bills that you least expect after a workers comp audit.