If you have a construction business and you have employees, you should have a workers compensation insurance, and the same goes for other businesses with more than one employee. Not all businesses have the same pricing for their workers compensation insurance premiums. The use of workers comp codes is helpful in figuring out what pricing of workers compensation insurance premiums must be followed. When it comes to most states, they make use of the coding system of the NCCI or National Council on Compensation Insurance. This coding system enables the classification of exposure and risks for a business. This would lead to better estimates of the amount of workers compensation insurance premium that you will be paying. However, there are some states that do not utilize this classification code with the likes of Delaware, California, New Jersey, New York, and Pennsylvania. Despite the fact that this system is also used by Texas, they have particular deviations in the rules of classification.
The NCCI is a profit organization that is independent. The statistical data from the NCCI is what insurance companies use for them to determine how much companies must pay for their worker’s compensation insurance premiums. A lot of difficulties are encountered when it comes to identifying the correct workers comp codes applicable for a business. It does not matter who is assigned to do the classification because there are still some businesses that make classification mistakes. If there is incorrection classification, the business might be getting premiums for their insurance that is either too low or too high. If these mistakes are made, a large bill may be paid by the business during the worker’s compensation audit once the policy expires.
If you have plans of using NCCI information, you cannot simply get them online for free. Due to the fact that NCCI is run for profit, you have to buy their proprietary manual to access information.
Your business as a whole is what these workers comp codes are made for. This means that they do not pay particular attention to the varying jobs inherent in your business. If your business focuses on pharmaceutical research, for instance, even if you have some clerical workers, your business is still classified under a code for pharmaceutical exposure than clerical exposure. The same cannot be said when the scenario involves dealing with a construction business. If you own construction business, you can make use of different code classifications for every employee. To check your qualifications, you have to provide the hours that you have for each code classification of workers compensation.
Again, determining the correct code for workers compensation is very hard. It is a good thing that there are expert consultants who will be more than willing to review and modify the code or codes that your business is using. By using the right workers comp codes, you can save thousands of your money and avoid bills that you least expect after a workers comp audit.