Workers compensation insurance is required for businesses who have more than one employee and even one employee and more when the business is related to construction. If you talk about workers compensation insurance premiums, the pricing is not the same across businesses. The use of workers comp codes is helpful in figuring out what pricing of workers compensation insurance premiums must be followed. For most states, they use a code system that is created by the NCCI or National Council on Compensation Insurance. The exposure and risks of business are classified using this coding system. This then leads to companies figuring out the amount of workers compensation insurance premium they should be paying. And yet, the NCCI classification is currently not in use in the states of Pennsylvania, Delaware, California, New York, and New Jersey. 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 misclassification is done, the insurance premium for the worker’s compensation can either be too high or too low. Once your policy expires and a workers compensation audit is done, you will find that you will be paying for a large bill.
You do not simply go online to gain access to important NCCI information. Because the organization is run for profit, they sell a manual with their proprietary information.
Your business as a whole is what these workers comp codes are made for. Simply put, they will not be minding the individual jobs that form part of 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. There is, however, an exception to the rule if the business is related to construction work. 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.
Once again, there are a lot of challenges to figuring out the comp code applicable to your worker’s compensation insurance. Fortunately, you can rely on consultants who can help you review and modify the codes that best apply to your business. Only with the right workers comp codes can you rest assured that unexpected bills will be avoided after a workers comp audit leading you to save thousands of your money.