Workers' Comp Class Codes: What They Are and Why They Matter

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Did you know that your workers' compensation insurance cost isn't just a random number? One of the biggest factors is something called "class codes." Let's break down what they are and how they impact your business.

What are Workers' Comp Class Codes?

Think of workers’ comp class codes as categories for different types of jobs. Insurance companies use them to estimate the risk of workplace injuries for each category. Most states use a standard system for consistency, but specific codes can still vary slightly.

How Do They Affect Your Premiums?

The riskier the job, the higher the class code rate – that's because those jobs tend to have more workplace injuries on average. Rates are based on the average number of injuries and claims within a particular job category. Each class code has a cost per $100 of payroll, so a code with a rate of $2 means you pay an estimated $2 for every $100 an employee in that role earns.

Finding Your Class Codes

This is where it can get tricky! To get the right codes (and the right rates), you need to accurately describe:

  • Your Industry: Manufacturing, construction, retail, healthcare.
  • Your Products/Services: The more detail, the better. Don't just say "construction" – specify if you're residential, commercial, etc.
  • Your Employees' Roles: Clerical, sales, framing, plumbing – be specific.
  • Contractors: Do you use them? They might need coverage too.

Why Accuracy Matters

Getting the details right will ensure you don’t overpay because your business is lumped into the wrong category. And most states require you to accurately report the kind of work you do. Providing correct information will protect you from increases in premium due to an audit, fines or worse..

Need Help? Get a quote with EverPeak and we’ll figure out your class codes and ensure you're getting the best possible workers' comp rates.

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Frequently Asked Questions

Find answers to commonly asked questions about workers’ compensation.

What is workers' compensation?
Workers’ compensation is a form of insurance that benefits employers and employees in the case of a work-related injury or illness.
Who is required to carry workers’ comp?
Workers’ compensation laws vary by state, so it’s important to know your state’s requirements. In many states, workers’ compensation is required for employers with one or more employees.
What benefits are available?
Workers’ compensation can include medical care, lost wages and death benefits. Workers' compensation coverage may also safeguard businesses from legal action if an employee experiences a work-related injury or illness.
Who pays for workers’ comp?
The employer is responsible for purchasing and maintaining workers’ compensation coverage.
How much does workers’ compensation insurance cost?
Workers’ compensation premiums are based on factors such as payroll, industry and claims history, so premiums vary between businesses.