Towards a Better Understanding of Workers’ Compensation Classification Codes
When we get to the classification system there is for the Workers’ Compensation, this is one system that is laden with some deal of complexities that as a matter of fact has been recognized even by the authorities such as the NCCI, the National Council Compensation Insurance. But this said and done, proper classification is of the greatest significance even as this happens to be so making a big difference in terms of premiums and rates.
Given this, the NCCI has as such come up with up to 600 classification codes for workers’ compensation and these are all intended to help with the need to cover the workplace. Each of these codes has their own unique rates which are dependent on the risk level and the level of exposure there is in the particular workplace or environment. It is this that explains the reasoning behind the difference in the rates you will find applicable for the various worker categories, such as the rates applied for the clerical workers will be lower as compared to what would be applied for the roofers. As a matter of fact, the workplace exposures for these two classes of employees happen to be a lot different with the roofers being at a much higher risk of getting injured on the job as opposed to the odds there are for the office employee.
In as much as this is the case, you should as well bear in mind the fact that there will be some of the instances where such proper classification may not be as straight and may only prove to be so complicated and call for so much detail. Thus you need to note the fact that there are some finer details that may go into the determination of the codes that an employer will be given and as we already have mentioned, this goes such a long way in determining your rates and premiums.
One thing that is so far established is that the NCCI gets the classification codes and their definition. But what remains is who it is who really determines the classification codes that will be applicable on an employer’s Workers’ Compensation Insurance Policy. To learn more on these, read on and see as much as has been given below.
To get us going in so far as this goes, it would be wise to first take a look at the roles played by the Insurance Agents and the PEO brokers. Generally, the classification codes would often be suggested by the Insurance Agents or the PEO Brokerage firms who would be offering the workers’ compensation to the concerned employer.