Workers Comp Codes Overview

A workers comp code overview -

Workers comp codes are the backbone in which insurance companies determine pricing for work comp insurance. To put it simply workers comp codes are a set of four numbers assigned to a description for a specific job task. Each of the workers comp codes are assigned a rate when used to price out a work comp policy. Where it gets a bit confusing is when you have to decide between 1 of the 700 workers compensation codes to use.

Here's a quick sample for you to see what I'm talking about.

2003 Bakery & Drivers, Route Supervisors
2068 Milk Products Mfg NOC
2501 Clothing Mfg
2578 Bag or Sack Mfg
2581 Carpet, Rug or Upholstery Cleaning - shop or outside - & Drivers
2583 Dry Cleaner & Drivers
2587 Uniform Rental Company & Route Supervisors and Drivers
2688 Leather Goods Mfg NOC

Where it gets more confusing is when you get into the specific categories of each code.

For example:

* Iron Steel Erection - decorative
* Iron Steel Erection - door & sash
* Iron Steel Erection - frame structures not over two stories
* Iron Steel Erection - metal bridges

What happens if you have overlapping job duties?

What happens is the insurance company tries to put you in the most expensive code possible.

To top it off there are some really bizarre work comp codes that can really leave you scratching your head.

The system of classification was designed as an organized structure to help group similar job duties together. It is a means of allowing employers to accurately classify employees across all industries.

Needless to say the whole system has become very convoluted and difficult to understand.

Once the "correct" workers comp codes have been assigned (which almost always is not correct for some employees) this is then used as one of the modifiers to calculate your premiums along with your experience modification rating.

Many employers incorrectly assume that their broker or the insurance auditor classified their employees under the correct workers compensation codes. And most employers are also overpaying on their insurance premiums and don't know it.

My suggestion to you is to take a look up in the right hand corner of this site under free evaluation and find out how much the insurance companies overcharge businesses.

I recommend that you thoroughly go through each of your workers comp codes and try and make sure that each employee is under the correct classification.