Technology associated with construction has dramatically changed operations. Carefully check the class codes and their descriptions to assure proper premiums.
Years ago, 5606 - contractor supervisors - served to describe on-site personnel who actively performed construction activities while managing the site. The rate was equivalent to site carpenters. That code has evolved into computer-carrying, service-providing construction managers and executives who document the construction process; the rate is closer to outside sales representatives now.
Even excavation and site work is being transformed by GPS and design software. Computers can now design cut-and-fill patterns for efficiency, and labor is more involved in checking geotechnical and environmental properties of the soils than in moving them. If your business handles recycled construction materials, review relevant classifications such as Concrete and Asphalt recyclers (C&D) — Class Code 10256.
As production technology improves, new sub-codes develop to reflect decreases in exposure. Painting, carpentry, electrical and other trades now use a selection of eight or ten separate codes to describe exact activities. More components are built in shops and brought to the site, and that process can change the class code of installers and builders.
Many businesses also rely on local hauling and delivery to move prefabricated components and materials. If your operation includes transport or local-only hauling, consider how codes such as NCCI unified trucking class code 7219 for workers compensation might apply to those activities.
The trend is toward more computer-driven operations: less general labor and more specialists. As this trend continues, class codes will be added, deleted and descriptions changed. There are currently hundreds of class codes; some are antiquated or have taken on new meanings. For specialized recycling or salvage operations you should also review classifications like Glass Recyclers (Class Code: 54077) to ensure proper placement.
It pays to become familiar with the classifications. If your business has been active for many years, the "governing code" may be incorrect. The governing code is the catch-all for your business that best describes the overall operation, which is more obvious in manufacturing. Corrugated box manufacturing, for example, has been reorganized into several class codes to reflect laminating, cutting and folding, and fully integrated operations.
Read your relevant class codes and think about which one reflects your operations. Or ask your agent to do it for you.
Frequently Asked Questions
How often should I review my class code?
Review class codes whenever your operations, processes, or major equipment change; an annual check is a good practice.
Who determines the correct class code for my business?
Your insurance carrier or agent, working with NCCI or your state's rating bureau, assigns class codes and can help interpret them.
Can improved technology lower my premium by changing my class code?
Yes—automation or off-site fabrication that reduces on-site risk can lead to different, often lower-risk class codes, but each change is evaluated case by case.