How Do Workers' Comp Class Codes Impact Insurance Cost?

The National Council on Compensation Insurance (NCCI) maintains workers’ comp class codes. The NCCI bases class codes on the types of jobs that workers’ do, which helps insurers calculate worker’s compensation cost. Having high-risk class code employees can result in a higher workers’ compensation cost.

What Are the Benefits of Pay-As-You-Go Workers' Compensation Insurance?

One of the benefits of pay-as-you-go workers’ compensation insurance is a lower upfront cost, but there are others. ● Eliminates large lump sum payments ● Calculates up-to-date workers’ comp rates each payroll cycle ● Makes the workers’ compensation audit process easier, which can save you time and money ● Improves cash flow ● Ensures you’re paying an accurate premium

Workers' Compensation Class Codes: What You Need To Know

Key Takeaways

Workers’ compensation class codes group jobs based on how risky they are, which helps determine insurance costs.

Class codes can vary by state, but many states use the National Council on Compensation Insurance (NCCI) system to keep job risk ratings consistent.

Riskier jobs, like construction, typically see higher workers’ comp rates than lower risk jobs, like a computer programmer.

What Are Workers’ Compensation Class Codes?

Workers’ compensation class codes are three- to four-digit identifiers that place each job role into a specific risk category based on its injury exposure level. Insurance companies use these codes to help estimate risk and determine their price for workers’ compensation insurance.

Insurance agents or underwriters can look up the workers’ comp codes in the National Council on Compensation Insurance (NCCI) Scopes Manual. Each workers’ comp class code includes information on the losses accumulated by specific types of work. From there, insurance companies set their workers’ compensation costs.

What Is the National Council on Compensation Insurance (NCCI)?

The NCCI is an independent advisory organization that is largely funded by insurance companies. The NCCI has a class code system that insurance companies use to determine workers’ compensation costs. The NCCI creates their workers’ comp job classification codes based on industry data and trends they’ve analyzed independently. They also work with state insurance regulators and insurance companies to support the workers’ compensation insurance industry.

States across the U.S. trust the NCCI’s expertise to help guide their risk evaluations. Some of these states are:

Learn more about your state’s workers’ compensation insurance requirements.

How Workers’ Comp Class Codes Reflect Risk Levels

Generally, the more risk of injury a worker faces, the higher the cost of workers’ compensation insurance in the industry. For example, construction workers typically have a higher level of risk than graphic designers. The workers’ compensation codes for both jobs would reflect the difference in risk.

Various contractors also have different codes and risk levels. For example, electricians have different WC codes than carpenters.

Workers’ comp class codes are a starting point for insurance companies as they determine prices and provide coverage to your business.

Example List of Workers’ Comp Codes

Here are a few examples of workers’ compensation class codes that show how different job types are grouped by risk:

Clerical office employees: Code 8810 – This code is used for office workers, computer programmers, clerical staff and more, indicating that there’s a lower risk associated with this job.
Construction worker: Code 0020 – This code indicates a higher level of risk associated with the job. This code can be used for someone who lays bricks and concrete, for example.

Are Workers’ Compensation Class Codes the Same for All States?

Workers’ compensation class codes are not the same in every state. That said, most use the NCCI’s class code system. It helps insurance companies easily see the risk certain jobs face and brings consistency to workers’ comp class codes across states. Because these codes are based on national industry data, they also help create a standardized way to classify job-related risks across industries.

In contrast, some states operate with independent or monopolistic state codes. This means a state’s insurance class code system can vary based on its respective rules and regulations. For example, in certain states, a business may have to get coverage through a state fund for workers’ compensation.

There are four monopolistic states:

Some independent states include:

If you want to research your state’s WC code system, you can use the NCCI State Map.

How Much Does Workers’ Compensation Cost?

On average, most of The Hartford’s customers with less than $300,000 in payroll pay about $81 a month for workers’ compensation insurance. Some policies can start as low as $13 a month.^** Keep in mind that the cost of workers’ compensation varies because every business is unique. Insurers determine workers’ comp rates by looking at many different factors, including:

The laws in your state: Researching your state laws is a must. Some states are monopolistic or independent, while others follow the NCCI class code system. This means the amount you pay could vary.
The size of your payroll: The more employees you have, the more your workers’ compensation insurance will cost.
The type of work your employees do: Workers’ compensation class codes describe the level of risk specific jobs face. Generally, the more risk of injury your employees get exposed to, the more you’ll pay for workers’ compensation insurance. It’s a similar approach to how insurance companies use general liability class codes to determine costs for that coverage.

How To Find My State’s Workers’ Compensation Rates

The Hartford has workers’ compensation state information that you can use to learn more about local laws and regulations. You can also visit NCCI for more information on workers’ compensation classification codes and rates.

Your State’s Workers’ Comp Laws

Workers’ compensation laws vary by state. Select a state using the map or dropdown menu and learn about its workers’ compensation requirements. Or you can browse all of the states’ workers’ comp policy coverages to find the best workers’ comp insurance for your business.

The Hartford’s Workers’ Compensation Insurance Coverage

We can offer you more than just great rates for workers’ compensation insurance. Our coverage includes:

A preferred medical provider network that gives employees access to over 1 million medical professionals.

Prescription drug features that include more than 65,000 pharmacies throughout the U.S.

Experienced nurse case managers who can coordinate the right treatments to help employees regain their health.

Pay-as-you-go billing to help you manage cash flow effectively.

The Hartford has helped protect businesses and employees with workers’ compensation insurance for more than 100 years. Get a quote today and see how our workers’ compensation insurance can help your business.

Frequently Asked Questions About Workers’ Compensation Classification Codes

How Do I Find My Workers’ Comp Class Code?

The fastest and easiest way to find your class code for workers’ compensation is to get a quote. Determining your class code is part of the quoting process with The Hartford. Another way to find out your class code is to use the National Council on Compensation Insurance (NCCI) look-up tool. You can also look at your existing insurance policy documents, and it will be listed on your policy declarations. Lastly, you can find your class code by reaching out to your agent or broker.

What Are Workers’ Comp Classification Codes?

Workers’ comp classification codes are numbers used to assign different levels of risk to specific jobs. These number labels tell insurance companies what kind of work is involved in your job or industry and how risky it is. Typically, the higher the risk, the more your insurance will cost because there’s a greater chance of a worker getting hurt.

What Do Class Codes Mean?

Class codes for workers’ compensation are number codes that rank and categorize jobs into groups associated with how risky the work is. Insurance companies use these codes to determine how likely an employee is to get hurt and how much their coverage should cost as a result. The class codes help standardize coverage and costs across industries.