Things to know about Workers’ Compensation Codes


A class code is a three or four-digit numerical designation issued by NCCI or a State Rating Bureau such as the WCIRB in California. When workers comp class codes lookup the Class codes are provided to workers to differentiate between the various job functions or scope of work they undertake. The NCCI categorization system, which has almost 800 distinct class codes, serves as the foundation for both pricing and underwriting workers’ compensation insurance premiums. The National Council on Compensation Insurance is abbreviated as NCCI. They supply insurance firms and states with statistical data.

  • Workers’ Compensation Codes Influence Rates and Pricing

Classifying a risk, or workplace exposure, inside the appropriate NCCI workers’ compensation class code is the basic method of pricing workers’ compensation insurance. Insurance agents’ or underwriters’ incorrect risk classifications will result in an incorrect premium. During an audit, payroll may be reclassified and relocated to the right class code. This might result in a credit or debit to your policy. A workers’ compensation audit is the process of ensuring that payroll was correctly estimated and personnel was properly categorized.

  • What Is the Importance of Class Codes?

The workers’ compensation categorization system is significant since it is one of the elements used by insurance brokers to set workers’ compensation insurance rates.

As previously stated, a workers’ comp class code indicates an insurance agent how much danger is involved with the job—and, generally speaking, the higher the risk, the higher the workers’ comp insurance premium. Having an exact class code for all of your employees helps guarantee that you’re obtaining accurate, competitive rates for workers’ comp insurance—and that you’re not overpaying (or underpaying) for your insurance.

Answering phones, for example, has less risk than welding since you’re less likely to injure yourself answering phones than you are fusing metal—and, as a result, you’re less likely to need to make a workers’ compensation claim. As a result, insurance premiums for a receptionist are often cheaper than those for a welder. The workers’ compensation class code provides your insurer with information about the risk level of each function, allowing them to set the appropriate rates. If your coding is incorrect, they won’t have the information they need to give appropriate pricing for workers’ compensation insurance—and you may end up with a cost that’s either too expensive (for example, if your receptionist position was classed as a welder) or too cheap (if your welder position was coded as a receptionist).

If your rates wind up being too expensive, you will receive a refund after the policy—but that is money you might have spent on your business during the year. And what if your prices are too low? Then you’ll be hit with a big, unexpected audit charge from the insurance provider, putting your firm’s finances in peril.

Is the workers’ compensation procedure stressful to you? You don’t have to worry about paying too much or too little for workers’ compensation insurance when you use it hourly with the help of  The software calculates and pays your workers’ compensation premiums automatically based on real-time payroll data with to-the-penny precision, ensuring that you never underpay or overpay for premiums—or find yourself looking at a massive audit bill that you don’t know how to pay.

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