Workers Compensation Class Codes

Insurance for Floor Installation

Mitchell Sharp June 29, 2017 No Comments

Floor installation is an activity that brings many unique risks to a business that make it a tad more difficult to quote from an insurance perspective. The risks faced by a business in this industry are very different from the risks faced by a janitorial services company, an automobile service company, or even a trucking company. Floor laying, finishing and refinishing operations are a type of specialty carpentry that increases exposures involving the actual construction and lay out of floors in both residential or commercial buildings. This may include the installation of floor coverings such as linoleum, tile or carpeting. There may be certain types of chemicals your workers are exposed to that can increase the severity of a workers compensation claim. For brand new structures, floor installation may include cutting and installing sub-flooring over a structural frame, installing hardwood flooring, and applying layers of paint and/or varnish. Each type of activity brings with it its own unique set of risks. For this reason it is extremely important for a business owner in this industry to talk a little longer with their insurance agent about what exactly the employees of the business do and do not do on a daily basis. The insurance agent is in the business of analyzing risk, so if they are absent the appropriate amount of information it is in their best interest to always assume more risk. IF they assume more risk it can cause your business to be classified improperly which will cause your businesses premium to increase.

Unique Workers Compensation issues for Floor Installation Businesses

Workers compensation exposures vary based on the size and nature any job. This is very much the case in the floor installation industry. Replacing the carpet in one room of a 10 year old house is dramatically different than replacing the hardwood floors of a 5,000 square foot house that is 50 years and located in a humid area like the Florida Gulf Coast. From an insurance agency perspective they have to assume you are doing both types of activities in order to protect the risk their own business takes. If you are a one man team that only installs carpets in new houses than you may be in a classification code with less risk and consequently a lower rate in premium. This type of mistake usually gets fixed during the end of term audit, but it can still tie up useful cash in paying too much premium throughout the year or it might cause a bit of a surprise if you have to pay the additional premium at the end of the term.

Here are several common Workers Compensation Class Codes:

• 5478- Carpet, Linoleum, Vinyl Installation

• 5438- Tile Floor Installation

• 5437- Hardwood Floor Installation and Refinishing

• 5645- Residential Construction

• 5651- Commercial Carpentry

• 5436- California- Hardwood Floor Installation

Pest Control

Mitchell Sharp June 22, 2017 No Comments

What risks do Pest Control Companies face that relate to workers compensation insurance?

Pest control companies and fumigators are the type of small businesses that provide services to both commercial and residential customers. This presents risks that can be varied and diverse. The pest control agent or exterminator determines the type of pest a property faces and the most effective method of removal. At the same time they must determining what will cause the least amount of disruption to the customer. This disruption can come in the form of interrupting business operations or making the home life uncomfortable or inhabitable for a family. All of these issues must be taken in to consideration by the business and these decisions leave the business at risk of liability to others as well as to their employees.

With the issues a pest control company faces on a daily basis comes an an amount of risk that is higher than the average business. Workers compensation exposure can be high for the Pest Control industry. Common hazards include slips and falls during application; minor injuries while using hand tools; lifting injury and back injuries, hernia, sprain and strain. Employees can experience lung, eye, or skin irritations due to the chemicals. The impact of these chemicals can be immediate or long term. In some Pest Control companies seasonal employees may make safety a challenge. Loss potential becomes severe if the contractor fails to train and supervise employees properly. This is especially important when it comes to the proper use of protective gear by the employees.

Common Workers Compensation Class Codes:

• 9014- Janitorial Services by Contractors– (Florida- Exterminators)

• 4828- Chemical Blending and Fumigation

• 9031- California Code- Pest Control- All Operations

• 0046- Massachusetts Code- Pesticide Application

Artisan Contractors: Painters

Mitchell Sharp May 26, 2017 No Comments

The term artisan contractor is one used widely throughout the insurance industry, but is not so common throughout the general population. The term includes carpenter, plumber, painter, electrician, mechanic, mason, or any other sort of skilled contractor. The level of risk that each of these professions takes on is different and because of that the amount they pay for commercial insurance premium is reflected by that amount of risk.

Get the best information about insurance for a painter at workerscompensationclasscodes.com

For this reason; if you operate in one of these industries, it is important to spend some extra time speaking with your insurance agent about precisely what your business does and does not do. This is especially important for handy man contractors who may do several types of work that may not be able to put them in one particular classification code. After a thorough conversation with your agent, they should be able to properly classify you for all of your business insurance needs.

When it comes to workers compensation coverage, similar to that of an electrician, risks for a painter vary based on the size and nature of the job. Employees may be exposed to dust and chips containing lead. Lifting, back injury, hernia, and sprain and strain are all common occurrences for a painter as paint buckets can be heavy. How your and your employees use power tools can result in cuts and burns that cause claims.

When painting or other work is done on ladders and scaffolds, there is a potential for injury from falling or being struck by falling objects. Adverse weather conditions may be a risk to the painter as well. Good maintenance of scaffolds, proper use of basic safety equipment, such as properly installed guards, steel-toed shoes, and eye protection, and strict enforcement of safety practices are important to prevent claims. Another serious exposure is the removal of old paint. Lack of a procedure to determine if the paint to be removed is lead based, or lack of procedures for safe clean-up and disposal of chips and the solvents used to remove lead, adds significantly to the potential for claims.

Common classification codes that are used by Painters.

• 5037- Painting Contractor- Metal Structures Above 2 Stories

• 9501- Painters- Shop Only

• 5474- Painters and Painting Contractors

• 6874- Federal Code- Painting Ship Hulls

Wood Products Manufacturers

Mitchell Sharp April 27, 2017 No Comments

Wood products manufacturing, from an insurance industry perspective, can be a difficult business to insure. This is because of how different the industry is in nature. Assessing the risk of this industry is much different than assessing the risk of an HVAC or a pest control company. For this reason many businesses are forced to purchase coverage from their state provider. This is almost always at a higher rate than if purchasing on the open market. Some agencies partner with many different carriers, not just a select few, and can give you a higher probability of finding a carrier who has an appetite for this industry.

Appetites for certain types of coverage and industries is ever changing for insurance carriers. Some carriers will change their appetite because of a higher than normal amount of losses during a given year. Some times they even change their appetite because of a change in technology that impacts the industry you operate. It may be simply the carrier has found some industries just do not bring in enough profit for them to take the risk.

For this reason, it is extremely important for you to consider partnering with an independent insurance agent who can quote policies from many carriers and not just a select few. It is also important to take extra time to speak long and honestly with your agent about what types of activities your business does and does not partake in. Insurance professionals are in the business of analyzing risk, so it is in their best interest to always assume more risk. If you are in an industry that has a significantly different amount of risk your carrier may be denying you coverage because you are classified improperly. If you take the extra time to let your agent know more information about your business the more likely they are to find you coverage and find it at a better price.

This can impact the wood products industry a lot because of how many different roles because of the different types of businesses that operate in this industry. There are more than ten different classification codes just for workers compensation insurance coverage. Depending on if you are a manufacturer, a distributor or a retailer can have an enormous impact on the amount you pay in premium. Having an open and honest relationship with your insurance agent will help you prevent any and all of these potential problems.

Industry Classes Included in our Wooden Products Programs

Class Codes	Brief Business Description of Operations we Cover
2710	Sawmill operations.
2714	Veneer manufacturing.
2731	Planing and molding mills.
2735	Furniture stock manufacturing.
2759	Pallet Manufacturing.
2797	Mobile home or wooden trailer manufacturing.
2802	Carpentry- Shop. Includes trusses and assembled millwork
2841	Woodenware manufacturing.
2881	Furniture manufacturing and cabinet shop assembled by hand.
2883	Wood furniture manufacturing and cabinet shop.
2915	Veneer products manufacturing with and without veneer manufacturing. Includes class code 2916.
8232	Lumberyards- retail and wholesale.

What is the Walsh Test?

Mitchell Sharp March 30, 2017 No Comments

And why does the W.A.L.S.H. Test matter for your small business?

The W.A.L.S.H. Test is an acronym that is used to determine jurisdiction for a Workers’ Compensation Insurance Claim when a claim occurs involving more than one state. Because workers comp systems are governed by the individual states, it is difficult for the legal system to legislate liability issues that involve more than one state. Where this is most common is when a businesses operates in multiple states. The W.A.L.S.H. Test applies to jurisdiction whenever a insurance claim occurs in a state other than the company’s primary headquarters. Its most common use is to determine how work comp coverage will apply to the jurisdiction of the case.

Walsh is an acronym judges use to determine jurisdiction for a workers’ compensation insurance claim. The acronym stands for:

• Worked
• Accident
• Lived
• Salaried
• Hired

The weight of each part of the jurisdiction depends on the position of the term in the acronym W.A.L.S.H. Worked carries the most importance and Hired has the least importance when considering jurisdiction. The higher on the list the higher the relevance in relation to jurisdiction.

This comes in to play in a city, like Charlotte, NC for example. This city sits very close to the border between North and South Carolina. Many businesses frequently operate in both states. Other more complicated instances occur with trucking companies or in the airline industry where they operate nationwide. One hypothetical example is where a marketing associate lives in South Carolina. The marketing associate gets hired by ABC marketing company just across the border in North Carolina. The marketing associate has job responsibilities where he travels to clients in both North and South Carolina as well as travelling across the country periodically. ABC marketing company is headquartered in Colorado, which is where the marketing associate is salaried. The marketing associate goes to a conference in Seattle, Washington and gets in to a wreck in a rental car while at the conference.

• Worked – Multiple states
• Accident – Washington
• Lived – South Carolina
• Salaried – Colorado
• Hired – North Carolina

In this instance Washington would probably have Jurisdiction. This is because the marketing associate works in many different states, so W would lose relevance. Where the Accident took place is next on the Walsh Test. The fact that the marketing associate Lived in South Carolina has less relevance to this case. So does the fact the associate was Salaried in Colorado or Hired in North Carolina.

Salaried and Hired are typically lowest on the totem pole because they have the least to do with the accident itself. The fact that an employee is Salaried in Colorado and was Hired in North Carolina does not have much to do with a workers’ compensation claim regarding a car Accident that took place in Washington.

Where the employee Worked and where the Accident took place have the highest relevance. This is because where the worker does business most of the time and where the accident took place have the most to do with this specific occurrence.
The one situation where the W.A.L.S.H. does not take effect is in monopolistic states. These states are North Dakota, Ohio, Washington and Wyoming. These monopolistic states require an employer to obtain workers compensation insurance from a compulsory state fund or qualify as a self-insurer. It is critically important to let your agent know everything your business is doing and especially where. This can allow your agent to provide the correct coverage to protect your business when an occurrence takes place in one of these monopolistic states.

So the W.A.L.S.H. Test is a tool judges use to determine jurisdiction in Workers’ Compensation Claims. It is relevant to businesses who operate across state lines. Where your employees do their work can make all the difference in your company being liable for a Workers Compensation Claim — and to determine if your policy will cover the claim. Talk long and honestly with your agent about where and how you do business, and make sure that you have a state listed in section 3A of your workers compensation policy if you have an employee that might get injured in another state.

Heating and Air Conditioning Contractors (HVAC)

Mitchell Sharp March 23, 2017 No Comments

Heating and Air Conditioning Contractors (HVAC) are the type of business that provide services for and repair heating and air conditioning units. They provide these services for both commercial and residential clients. HVAC companies have to have employees who are knowledgeable about both duct and vent work, the different types of fuel sources for heating equipment, which can be natural or LP gas, electric, steam, solid fuel, coal, or fuel oil. Many contractors also install, service, and repair air conditioners. While air conditioning units are normally electric-powered, they are charged with different coolants, some of which may be hazardous.

All of these different types of work bring their own unique risks to the HVAC Contractor. For this reason, it is very important for you to have an extended conversation with your insurance agent about all of the types of work you do and do not participate in. It is especially important to inform your agent if there are certain types of work you do not partake in. There are numerous classification codes for each industry type depending upon the type of work your business does. If your business is classified improperly it can dramatically impact what you pay in premium for a number of commercial insurance policies. Here are the 4 most commonly used classification codes for HVAC Contractors.

Common HVAC Workers Compensation Class Codes:

5537- Heating, Ventilation, A/C, Refrigeration Systems- Install, Service, Repair
8720-Heating and Air Conditioning- Inspection and Outside Sales
3726- Boiler Installation or Repair
5183- Plumbing- Gas or Water

For HVAC Contractors, workers’ compensation exposures vary based on the size and nature of the job. Both residential and commercial work involves lifting, work with hand tools, wiring, and piping. Cuts from the fabrication and installation of sheet metal for ducts and vents are common. Lifting injuries such as hernias, strains and sprains plus back injuries may occur. Electrical burns are common; electrocution can occur from the use of high-voltage lines. Any time work is done above ground, injury or death from falls and being struck by falling objects can occur. Slips and falls, foreign object in eyes, major and minor burns, and inhalation of fumes are all potential hazards.

All of these types of activities need to be acknowledged to your insurance agent. Each policy you secure (not just workers’ compensation) has exclusions. If you are classified improperly it can cost you more in premium or may result in a claim not being covered. Leaving the cost of the claim to the responsibility of you and your business. HVAC Contractors can prevent this from occurring by having a detailed conversation about all business operations and what types of coverages you do and do not need to purchase for your business.

Additional HVAC Insurance Classification Codes

SIC Business Insurance Codes:

1711: Plumbing, Heating and Air Conditioning
7699: Equipment Installation and Shops

NAICS Liability Classifications:

238220: Plumbing, Heating and Air Conditioning Contractors

Business ISO General Liability:

95647: Heating and A/C Systems—Dealers, Installers, Service and Repair—NO LPG
95648: Heating and Air Conditioning Systems—Dealers, Installers, Service and Repair
91250: Boiler Inspection, Installation, Cleaning and Repair

Food Trucks are booming

Mitchell Sharp February 16, 2017 No Comments

The food truck industry is booming in 2017. All over the country, food trucks are popping up serving everything from fish tacos to barbecue sandwiches, to even Thai food. Because of this explosion in the food truck industry, more and more companies are needing insurance coverage for their new food truck businesses. Workers’ compensation insurance is regulated by the individual states, so it is important to check with the proper governing body in your state to ensure if you are required to purchase workers comp coverage. If you own and operate your food truck it may not be worthwhile to purchase coverage, but if you have multiple trucks or do not operate your truck yourself all the time it may well be worthwhile to purchase coverage for your employees.

Work comp exposures come from slips, falls, cuts, burns, heavy lifting, along with interactions with guests. Food service employees tend to be minimum wage and turnover is high. Employees should be trained on proper safety techniques for cooking and serving food. This training should be specific to food trucks. Do not assume because someone has experience working in a traditional restaurant that they know they procedures for food trucks. In order to save on coverage it is a good idea to offer incentives that encourage safety in the workplace and long-term employment. These show positive signs of management control. When these are in place, carriers are much more likely to offer credits or discounts on coverage and they are more likely not to raise or rate when a claim does occur.

Industry Classes Included in Our Restaurant/Bar Programs

Class Codes	Brief Business Description of Operations we Cover
9082	Restaurants with a traditional wait staff often belong in this code unless they can, otherwise, be classified into another code due to unique aspects of their business such the percentage of alcohol sold, catering, entertainment, etc. Traditional restaurants typically have servers who wait on the customer and receive gratuity or tips.
9083	Fast food restaurant will typically fall under this classification unless state specific rules require an alternate code. These types of restaurants could include standard fast food providers serving hamburgers, tacos, pizza, and sandwiches. Gratuity is generally not expected with fast food.
9084	Restaurants who receive more than 50% of their revenue from the sale of alcoholic beverages such as beer, wine, or liquor typically belong in the 9084 classification. This class is often used for bars, nightclubs, lounges, taverns, etc.
9058	Restaurants that are owned or operated in or by hotels will typically fall under class code 9058. For hotels, this code will often includes servers, cooks, kitchen help, bartenders, and managers. It may also include musicians and entertainers.
9053	Applies in CA, NJ, and OK. May include restaurant or tavern employees located in clubs such as swimming, tennis, and fitness clubs.
9079	Applies in CA, MA, NJ, OR, and TX. Depending on the state, this code could apply to vending, restaurants, bars, taverns, caterers, dance halls, and hotels.
9072	Applies to NY only. Includes fast food restaurants.
9071	Applies to NY only. Includes full service restaurants, buffets, diners, and other establishments providing wait service. May include musicians.

Workers Comp in 2017

Mitchell Sharp February 9, 2017 No Comments

Issues in Workers Comp to look out for in 2017

Things are changing at within every aspect of the insurance industry. Especially in the workers comp systems each state has for their workers and employers. Here are 5 issues that will be at the forefront of the Workers Compensation Insurance Industry in 2017.

Insurance Talent Gap

We have known for several years that the workforce in the insurance industry is aging. A significant percentage of the workforce is expected to retire in the next 10 years. To address this issue, companies in the insurance industry will have to enact a multi-layered approach. This should include working with colleges in developing risk management education and to use these partnerships to recruit and attract the top talent coming out of colleges and universities. The best companies in the insurance industry will find ways to pass on the vast knowledge of the retiring workforce, while also harnessing technology skills that many in the next generation of insurance leaders have. In order to attract the millennial generation, employers need to be more flexible by offering flexible hours and work-from-home options.

Alternatives to Opioids for Chronic Pain

Opioid addiction is a huge problem in the United States; especially for the workers comp systems in the states. For several years there has been quite a focus on reducing the amount of opioids prescribed within the workers compensation systems throughout the country. The focus on this issue is expected to be emphasized even more in 2017 and in to the future. There are several options for alternative pain management, but many of these methods are not covered by carriers. Carriers have been willing to approve opioid treatment options and that is probably going to continue for the foreseeable future and this is a large portion of the problem. One-size-fits-all approaches to pain management will not work for all patients. Many people within the workers compensation industry believe 2017 will be a year where improvements to the functionality of pain management will finally be considered.

Workers’ Compensation’s Public Image

There is and has been for some time, a growing effort to promote the benefits the workers’ compensation system gives to society. Everyday, workers’ compensation companies are attempting to make promote how much injured workers’ benefit from having the benefits in place only because of the workers compensation system. There still is a lot that can be done in the area of public relations. The industry needs to be more aggressive in talking about about the good things the industry does to help injured workers regain their quality of life. The industry can benefit from a better reputation in two main ways: first it will help the industry sell more policies and more effectively service injured workers and second it will help companies recruit the next generation of talent into our field. Workers’ compensation is about taking care of people and it is very meaningful work, but that work can only be meaningful when our customers understand the benefits they do receive from this necessary coverage.

State Legislative Agendas

There are several states that have severe issues with their workers compensation systems. For most states, the issues have been building up for several years. 2017 is the year when we will see new workers’ compensation legislation established in more than one state.

Machine Learning and Artificial Intelligence

Predictive analytics have been around for more than 10 years. Insurance professionals began using predictive analytics to identify what claims had a likelihood of having higher loss costs. Some other companies have used analytics to develop better safety and return-to-work programs. In 2017, the industry will begin to use machine learning. These computer programs are going to help carriers determine: Should all claims be handled by a claims adjuster? Can agencies more easily provide certificates for small business owners, do interventions on every claim impact the ultimate exposure? How companies deal with these technological issues will determine the success of companies for the foreseeable future.

Workers’ Compensation for Dry Cleaning businesses

Mitchell Sharp February 3, 2017 No Comments

For most dry cleaning businesses, workers’ compensation exposures can be high. A big reason for this is because of the chemicals that are used. These chemicals can cause skin and eye irritations, as well as serious lung and respiratory problems. Many dry cleaning agents pose a long-term threat from cumulative exposure and there should be a safety program in place to limit these issues among your workforce. Slips and falls can occur because of normal business operations. Lifting and material handling are common hazards these businesses face. This is especially hazardous for employees engaged in pickup or delivery. Repetitive motion injuries can be a concern. Workstations should be ergonomically designed. Pets owned by customers may attack or bite workers.

Considering the level of risk that a dry cleaning business does face, it is important for these businesses to have adequate safety programs in place and a thorough return to work plan for injured employees. These two things can help your business keep your employees healthy and productive as well as limit what you pay in premium for workers’ compensation coverage.

Like most industries, there are more than one class code for this industry. It is important to have a detailed conversation with your insurance agent about what exactly it is that your business does and does not do on a daily basis. Incorrectly classifying your business can cause a claim to not be covered and it can cost your business significantly in premium for workers comp coverage. Here are the most common class codes used for dry cleaning businesses:

Common Workers Compensation Class Codes:

• 2589- Dry Cleaning or Laundry- Retail Store and Drivers

• 2590- New York- Dry Cleaning or Laundry Store

• 8017- Retail Store (Pick-up and Drop-off only)

What Type of Building Do I have for Insurance Purposes?

Mitchell Sharp November 17, 2016 No Comments

It is Important to know what Type of Building do I have for Purposes of Commercial Insurance

This is a question that will be asked of you by insurance agents and loss control professionals with insurance carriers. It is important that you understand why they are asking and how to determine what type of building you have for insurance purposes.

Let us first look at how to determine what ISO construction class you are in. All buildings must be classified into one of 6 construction classes which is broken down for you below. Classification is based on 2 factors.

The first is Building Elements. This is the materials used in construction of your structure. Examples are wood, steel, or masonry. The areas that are looked at be built with these materials are the structural frame, interior and exterior load bearing walls, interior and exterior non load bearing walls, floor construction, and roof construction.

The second factor is Fire-Resistance Rating. All the building material used in construction has a rating which means the time it stands up to a fire and how quick it spreads to other areas. Your building is going to be rated by the weakest aspect. For example: if you have a wood roof vs a metal roof you would be rated in a higher premium bracket due to the fire rating of the wood material used to build the roof. Wood burns quicker and does not contain fire like metal.

Building Fire, Roof, Brand, Smoke, Risk

In summary to determine the ISO class we must know what type of roof, floor, walls, structural frame, and fire rating of building materials. Now let’s determine which class you may fall into.

ISO Class 1 is Called Frame. This is one of the most common classes used in construction. You will have wood walls, brick veneer (single layer for appearance only), stucco, and a wood roof that is not typically anchored. Primary examples of this class would by a residential home or offices that may have been converted from homes to commercial locations.

ISO Class 2 is Called Joisted Masonry. This class consist of concrete or cinder block load bearing walls. Could have structural brick along with a wood roof. The roof in this class is also typically not anchored. Examples of this are residential homes but also single story office building locations that do not have flat roofs. Main difference between this and Class 1 Frame is the increased amount of concrete, cinder, brick for load bearing and structural purposes whereas frame uses wood for these areas.

ISO Class 3 is Called Non Combustible. Construction of this type of structure will contain a minimal amount of wood. Load bearing walls will be brick, stone, concrete tilt up, or metal. Frame is generally steel. The roof is a steel deck which is flat or has a slight slope. Roofs could also be metal. The roof is anchored to the structure with metal bolts. Examples of this class would be warehouses, storage facilities, and manufacturing plants.

ISO Class 4 is Called Masonry Non Combustible. This structure is a class above ISO Class 3 because it reinforces its load bearing walls. They are usually tilt up concrete, precast concrete masonry, or concrete blocks on steel. The roof systems are steel decks, poured structural concrete on steel decks, or metal. The roof is also anchored by metal bolts. Examples of this class would be schools, shopping centers, outdoor malls, and warehouses, etc.

ISO Class 5 is Called Modified or Semi Fire Resistive. This class has semi wind resistive walls made out of protected steel or precast concrete tilt up. The roofs are similar to class 3 and 4 in which they are a steel deck or poured structural concrete. The roof is anchored by metal bolts. The heavy construction nature of this structure makes leads us to examples such as high rise office buildings.

ISO Class 6 is Called Fire Resistive. This is the strongest class possible. Walls are concrete, very well protected steel. Floors are 4” cast in place concrete, precast concrete or protected steel. The structure is wind resistive. Roofs are poured structural concrete and anchored by metal bolts. Office buildings are another example of this class along with parking garages.

The key thing to remember in determining your building class is you are only as strong as your weakest element. This is a quick overview of the classes and if you are looking for more details or have questions than reach out to your agent or insurance carrier and they will be able to help you out.