NCCI Class Code 8810 | Clerical and Office Employee
In most states, classification code 8810 is meant for Clerical and Office Employees. What distinguishes an employee as a clerical or office employee is difficult for many businesses to determine. Because of this difficulty, 8810 tends to be one of the most misused, misunderstood and most common misclassified class codes. Many businesses improperly place some or all of their staff in this classification code because the business will enjoy some of the lowest rates for workers compensation premium of any classification code.
In many instances, a business owner will attempt to place all employees under the classification code 8810 – Clerical and Office Employee. This is because this class code enjoys the lowest rates for workers compensation premium. Some of the employees may actually belong in this class code, but often times a majority of them do not. The main qualification to be listed in this class code is that the employee needs to always perform their job where there is some form of physical separation from employees engaged in other high hazard work *think walls and doors). Employees in this classification should also not have any type of contact or supervisory role over employees involved in physical labor. The area an employee classified as 8810 – Clerical and Office Employee should also be separate from any storage areas where inventory is secured.
When an office employee begins to perform any duties outside of their clerical duties, they more than likely need to have a different classification. This may include something as simple as walking or driving off the property to get the mail. A good example of this would be when a non-profit has a program director who spends a majority of their work week behind a desk, but they also have direct supervisory duties. Because these supervisory duties take them away from the office and force them to interact with the general public and the entire staff involved with other exposures, the employee cannot be classified 8810. WHen this occurs the employee must be placed the highest rated risk classification represented by those additional duties. Many employers combat this cost by assigning these additional duties to one or a select few employees.
It is important to pay particularly close attention to the separation of exposure between different work hazards. When an employee is misclassified into a less risky classification code like clerical office employees noc, it almost always gets cleared up during the end of term audit. When it does get noticed, the employer will owe additional premium in order to keep coverage in place moving forward. This can be a significant cost to a business at an inopportune time.
||Clerical Office Employees. This is the most common class code utilized and is common to most policies regardless of the nature of business because most businesses have one or more clerical office employees. Common duties include financial, drafting, telephone answering, inside sales, designers, editors, programmers, and general office staff.
Workers Comp Codes Determine What You Pay for Insurance Premium
Workers Compensation Classification Codes are a three or four digit code describing what each individual employee does on a daily basis. The codes are either created by the National Council on Compensation Insurance (NCCI) or a specific state rating bureau. NCCI partners with more than 30 states to recommend pure premium rates for Workers Comp Codes throughout the state workers compensation system. The code of each employee is one of the strongest determining factors when it comes to what a insurance carrier charges the business for workers compensation insurance premium. Here are five tips to make sure your business is doing everything possible to control what the business pays for workers compensation insurance.
Create In-depth Job Descriptions
Job descriptions are important when it comes to purchasing all types of commercial insurance, especially workers compensation coverage. The workers comp codes of employees determine what the business pays for work comp coverage. Some employees participate in more dangerous activities than others. Because of these activities, your business must pay more for workers comp coverage for the employees who participate in more dangerous activities. If you have many types of employees who engage in many different types of business activities it is very important to have in-depth job descriptions for your employees. Having all employees classified properly and having well-written job descriptions can save your business a lot of headaches in relation to your commercial insurance policies.
Sure up your operations
Each employees class code is based on the employees operations. The class code will be determined based on your client’s operations, work environment, job description, etc. The more dialed in you have your business, the easier it is to control claims and secure additional discounts when renewing insurance. Many carriers will offer discounts for things like safety programs, return to work programs, defensive driving courses, owning new equipment, and implementing an ergonomically friendly work space. If you have some or all of these aspects of your business and it is documented, you can usually secure a discount on commercial insurance.
Expect Rates to Fluctuate
Rates for commercial insurance vary from state to state and industry to industry. It is important to expect the rates to fluctuate from year to year. There are many aspects that go in to what a business pays for premium that include the workers comp code of the employees, the experience modification rating of the business, the amount of payroll of the business, and the claims history of the business. If one of these aspects changes, it can have a positive or negative impact on what a carrier charges for insurance.
Know Incorrect Workers Comp Codes Can Cost More
Placing the wrong Workers Compensation Classification Code on an employee or a number of employees can drastically impact what your business pays for premium. These discrepancies usually are found during the end of term audit. Mistakes can result in either a credit or debit to your policy. These discrepancies can happen when you have employees who work in multiple departments. Working with your Accounting Department or an outside Payroll Company can be a good way to ensure accurate classification and payroll numbers.
Communicate with your Carrier
Like most things in business, communication is key to success. It is important to communicate with both your agent and your carrier when things change about your business. If you purchase a new piece of equipment or you are taking on a new type of work, it is important to speak with your agent and carrier about these changes. It may mean the difference between a claim being denied or a carrier sending you a non-renewal.
Workers Compensation Insurance is required by law in 48 out of 50 states. It is offered based on a classification code system developed by the National Council for Compensation Insurance. There are more than 700 industry specific classification codes. Some industries have just one, some have many. For this reason, it is very important for business owners to take a few extra moments and speak with their insurance agent when buying or renewing their commercial insurance policy. It is crucial for a business owner to talk to their agent about the daily operations of their business. The key to getting the best policy on the best insurance package is to speak open and honestly with your insurance agent.
Remember that your insurance agent is on your side. They are there to help you get the fullest coverage at the best price possible. Your agent can only do this if you give them all the information possible to negotiate on your behalf with the insurance carriers. This is where having an agency that has the ability to quote your policy with many carriers is important. Some agencies only carry policies with a few select carriers. If your business is in a difficult to quote classification code than this can make it difficult to get a better price or get any coverage altogether. So having a relationship with an agency that can quote from a variety of carriers is important.
Next it is also important to ensure your agent and your carrier are aware of all the operations your business does and does not partake in. This can cause you to overpay or underpay on premium. Regardless of the amount of risk your business takes, it is very important to be classified correctly in the proper NCCI classification code. There is an audit of your business done at the end of every term. Usually if your business is coded incorrectly it gets caught during the audit. If you are actually supposed to be in a riskier code than you will end up owing more in premium. If you should be in a less risky code it can result in a refund, but you have been paying more in premium throughout the year. Typically, that is cash flow you could be using for other more urgent business needs.
A few industries that give us some perfect examples of industries that have classification codes that could be incorrectly coded are landscaping and commercial vs. residential cleaning companies. For example, landscaping has two class codes 9102 and 0042. 9102 is for businesses that only maintain existing lawns. 0042 is for businesses that install lawns, plants and other beds. 0042 is more dangerous. Because it is a riskier classification code the premium for these types of businesses is higher.
Another example of an industry that has multiple classification codes is the cleaning industry. Commercial cleaning is classification code 9014 and is the less risky class code. Residential cleaning service companies are class code 0917 and they cost more. The reason for a larger risk in the residential industry is because of the fact the employees are driving to one or more off site locations. Commercial cleaning companies typically have employees come to one location, like a mall, and clean one or more business at that one location. For residential cleaning companies, they are liable for any injuries that occur while the employee is driving to and from the different locations. These types of injuries may not be frequent, but when they do happen they tend to be much more expensive than a simple slip and fall while cleaning a building.
So the most important things any business owner can do to ensure they are classified correctly is to speak open and honestly with their agent about the what their business does and does not partake in. Again, this can prevent both over and under paying on premium. Regardless of whether you are in a a fairly risky class code like landscaping or you have a bunch of employees who sit around an office all year, it is imperative to have your business classified correctly. This can prevent your business from over paying throughout the year or from having a surprise when you are audited at the end of your term.