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What are NCCI classification codes?

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Quick Answer

NCCI classification codes, established by the National Council on Compensation Insurance, classify job duties according to the extent of risk for the employee performing the work. In most states, these codes provide the basis for pricing and underwriting workers' compensation insurance rates charged to employers. Classification codes represent businesses whose employees' job duties involve similar risks and thereby similar workers' compensation claim exposure. For example, code 0050 covers hay baling and drivers and code 0042 covers landscape gardening and drivers.

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Most businesses are insured under two or three classification codes. A berry farm with office staff should have coverage under NCCI code 8810, covering clerical exposure, and 0079, the code for farms - berry or vineyard and drivers.

The NCCI classification codes provide a basis for establishing workers' compensation rates using statistical experience. Each code is assigned a manual rate that aligns with the risk associated with the specific type of work, based on experience, in a specific state. Manual rates set for each classification code are identified as a dollar figure per $100 of payroll. A business employing clerical staff, code 8810, and others for freight handling of explosives and ammunition, code 7360, pays a lower rate for coverage of clerical employees than for the freight handlers, due to the greater risk of injury to the freight handlers.

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