A class code groups businesses with similar operations so they can share a base rate. The code drives the price, the carrier’s appetite decision and which forms apply.
Workers compensation class codes describe the type of work, and payroll is assigned to each code. NCCI publishes the codes in most states; states with their own rating bureaus, such as California, New York and Pennsylvania, use different numbering. A business usually gets one governing class, plus “standard exceptions” such as clerical office employees (8810 in NCCI states) and outside salespeople (8742).
General liability class codes describe the hazard and are rated on sales, payroll, area or units. Many carriers use ISO’s commercial lines classification codes; some use their own. They appear on the schedule of hazards.
Many carriers and quoting platforms also ask for an NAICS code, a government industry code used to sort businesses. It’s useful for appetite matching, but it’s not a rating class code.
How it shows up in an agency
A prospect calls itself a “handyman service.” Depending on the work actually done (carpentry, plumbing, electrical, painting), the WC and GL class codes and the carriers willing to write it can differ a lot. The producer asks what share of revenue comes from each type of work, then picks the codes that describe the main operation. Getting it wrong can lead to a premium audit adjustment, a mid-term cancellation, or a coverage dispute after a claim.
Carrier appetites by class are on our workers comp and general liability pages.
Common confusion
- One code per job, not per employee. In WC, employees are usually split by the work they do, not their titles, and only where the rules allow.
- The rate depends on the state. The same WC code carries different rates in different states.
- Misclassification is common. Audits often move payroll into a different class. Review codes at every renewal.