Underwriting – Classification Codes

No matter how carefully you try to avoid them, work–related injuries are bound to occur. While determining who, when, where and why an injury will occur is virtually impossible, the total number and types of injuries can be reasonably predicted. The New York Compensation Insurance Rating Board (NYCIRB) keeps track of the frequency, severity, and cost for all injuries to workers in New York State. Since injuries vary, the Board has chosen to use the cost of the injuries to determine the charge for insurance coverage.

New loss costs are published annually by NYCIRB to reflect injury cost and benefit changes and become the basis of carrier rates. Every October 1, Lovell receives loss cost information on all classifications and industries in the State. Notification is sent to policyholders prior to renewal.  For additional classification information, please access NYCIRB’s – Classification Digest.

Job Categories and Classifications

Loss costs are arranged by occupation code. The loss costs in the Manual reflect the fact that some types of work are more dangerous than others. For example, the painting of structural steel is more likely to result in higher losses than answering a phone in an office. Each occupation is given a code number. For example, electrical apparatus manufacturing is under code #3179, entitled “Electrical Apparatus Manufacturing, Not Otherwise Classified.” Code #4243 covers “Box Manufacturing – Folding Paper, Not Otherwise Classified.” It’s important that the work activities of your company personnel be classified under the correct code. Otherwise, you may be paying more premium than necessary. Also, if the activities of your employees change, let us know so they can be accurately reclassified. For information on occupation codes, click here.

Standard Exception Classifications

Some occupations are so commonplace that special classifications have been established for them. For example, all clerical employees are classified under the same code. This is more appropriate than including an employee who files paperwork for a sheet metal manufacturer in the same code as those who work on the factory assembly line. These special codes are referred to as the “Standard Exception Classifications.” Some other examples are Drafting Employees, Clerical Employees, Drivers and Chauffeurs, Salespersons and Collectors, and Executive Officers.  Using these special codes can frequently result in reduction of your premium.

  • Clerical Office Employees and Cashiers Code #8810, according to the Manual, applies to, “employees who are confined to keeping books or records or cash of the employer, or conducting correspondence, or who are engaged wholly in office work where such books or records or cash are kept, or where such correspondence is conducted, having no regular duty of any other nature in the service of the employer.” A clerk regularly exposed to the hazards of a given industry cannot be classified under code #8810. For example, a time, stock or tally clerk working on a shop floor must be classified in the appropriate industry. Cashiers exposed to store hazards must be classified under the appropriate store classification.
  • Telecommuter Employees Code 8871 are employees whose duties include the creation or maintenance of financial or other records of the employer, the handling of correspondence, technical drafting, telephone work that includes sales by phone, and any other duties of the employer from the residence office.
  • Drafting Employees Code #8810 also includes employees engaged exclusively in drafting and confined to office work. As in the case of clerical employees, drafters subject to other hazards must be classified differently.
  • Telecommuter Drafting Employees Code 8871 are employees engaged exclusively in drafting from their residence office. The entire payroll of any such employees exposed to other operations shall be assigned to the carrier’s highest-rated classification of operations to which they are exposed.
  • Drivers and Chauffeurs and Their Helpers Code #7380, according to the Manual, are employees engaged principally in such duties on or in connection with a vehicle. This classification also includes garage employees, and employees using bicycles in work operations. Please note that, in the case of vehicles under contract, if drivers and helpers engaged under contract lack workers’ compensation insurance, they become the responsibility of the business that hired them.  When payroll information is not available, auditors consider 1/3 of the total cost of the contract to be payroll. As in the case of other contractors, the payroll of the vehicle contractor will not be assigned to the insured, if the insured requires, and the contractor provides, evidence of workers’ compensation insurance.
  • Salespersons, Collectors, or Messengers – Outside Code #8742 covers employees who perform the above duties away from the employers’ premises. Employees who deliver merchandise, either by foot or by car, must be classified differently.
  • Executive Officers Code #8809 applies to the executive officers of a corporation who are appointed in accordance with the charter or by–laws of that corporation. Their duties must be limited to executive, clerical, or office supervisory functions. Executives who regularly perform the duties ordinarily undertaken by foremen, workers, or salespeople do not fall under this code.

NYS Assessment Charge

Legislation enacted in December of 1993 specifically prohibits the treatment of loss–based assessments as losses in the rate–making process. A separate, identifiable charge, known as the New York State Assessment, is applied to workers’ compensation policies in lieu of including the effect of these loss–based assessments in the manual rate structure. The following sets forth the applicable New York State Assessments to be applied to workers’ compensation policies effective October 1, 2005, and thereafter. The total charge, shown in the right–hand column below, applies to all classifications with the exceptions of codes #7370 (“Volunteer Ambulance Workers”) and #7711 (“Volunteer Firefighters”). These codes have unique charges due to the applicability of only certain Special Funds and differing Workers’ Compensation Board administrative expenses for these classifications.

The following should also be noted regarding the assessment charge:

  1. The New York State Assessment is to be applied to standard premium, which is defined as exposure base X Board manual rates X experience modification X any applicable territory differential premium X any applicable Premium Adjustment Program policy credit factor X the additional charge for terrorism, and the charge for natural disasters and catastrophic industrial accidents.  The assessment for NYSIF is based on Total NYSIF Premium as any discount or differential is deemed a deviation to loss cost.
  2. The assessment charge (dollar amount) is subject to change on audit.
  3. Since there is no requirement in the approved legislation to list each charge separately on the policy information page, a single line entry may be used.
  4. Monies collected from the policy charges are not to be considered premium; however, the State of New York will consider these amounts as premium for premium tax purposes.
  5. The New York State Assessment charge percentage is subject to change annually.

Classification Codes by Safety Group

Use Lovell’s class code look up to see if we have a safety group for your business:  Safety Group Class Code Look-up