What Happens to Workers Compensation When a Business Changes Operations?
By Randy Sieberg, CIC, ARM, CRM
Business operations are placed or classified into the workers compensation codes or descriptions that match the type of the work being performed by its employees. Out of 700 or so workers compensation classification codes available for use, the governing class of a business is that single workers compensation code that applies to the majority of payroll and which best represents the employer's business and what they do.
Any change to business operations may have an impact on the classification codes of their workers compensation insurance program.
As an example perhaps the owner of a residential carpentry business who previously specialized in remodels and decks decides to change, because of an opportunity in his service area, to performing roofing tear offs and re-do's. In this case the business owner would more than likely experience a significant increase in his workers compensation premium after audit due to the higher classification of roofing being applied.
Another example may be a business owner who, rather than changing his total business operation, decides to add another division to his business perhaps a metal goods manufacturer who adds a finishing operation or who adds a wood products or delivery service.
So keep in mind, if you change your business operation, you will need to modify your workers compensation classification codes on your policy to reflect that change.
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This article is brought to you by WorkCompConsultants.com,
an independent workers compensation consulting firm dedicated to helping employers prevent and resolve work comp issues.