Definition of Workers Compensation Class Codes


Workers comp class codes accurately identify various workplace exposures.

What are workers comp class codes?  

Worker’s comp class codes are a compilation of job definitions. The codes’ design accurately identifies various workplace exposures. Each specific job classification is assigned a 4-digit number. Each worker’s compensation code has its own rate for the purpose of calculating premiums on a policy. The resulting pure premium rate for the classification reflects the average anticipated cost of benefits per every $100 of payroll incurred by businesses within the particular industry.

Why are workers compensation class codes important to a small business?

These codes allow insurance companies to measure risk among their customers — and also price workers’ compensation insurance policies.

  • These rates are lower for office employees because their work-related injuries are less frequent/severe.
  • Workers’ comp rates are higher for companies that have a greater chance of physical injury (ie. construction, transportation, manufacturing, etc).

Class codes are the most significant factor in determining an employer’s workers’ comp insurance rates.

What is the history of workers comp class codes?  

The National Council on Compensation Insurance (NCCI), an advisory organization supported and funded by insurance providers, created these codes.

The NCCI and insurance companies continue to establish and maintain workers’ compensation classification codes for hundreds of thousands of employers across the United States. Some states have rating bureaus that oversee their own sets of workers’ comp codes.

Other terms similar to workers compensation class codes that can assist you 

  • Workers’ compensation: This is an employer-paid insurance that covers lost wages and medical costs owed to employees who suffer a work-related injury or illness.
  • Workplace disability: The ADA defines a person with a disability as someone who has a physical or mental impairment that seriously limits one or more major life activities, or who is regarded as having such impairments.

Summary of the definition of workers comp class codes

Workers comp class codes are a compilation of job definitions. The codes’ design accurately identifies various workplace exposures via an assigned 4-digit number.

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