In construction, workers' comp isn't just a line item—it's one of your biggest operating expenses. But why are the rates so high?
The Class Code System
Insurance companies assign every job a "Class Code." An office clerk might be code 8810 (very cheap), while a roofing worker might be code 5551 (very expensive). Misclassifying employees during an audit can result in massive back-billing.
Your Experience Modifier (E-Mod)
If your business has fewer accidents than average, your E-Mod drops below 1.0, giving you a discount. If you have a bad track record, your E-Mod goes above 1.0, and you pay a penalty.
Frequently Asked Questions
About This Guide
This guide was researched and written by the General Liability Guide editorial team to help business owners navigate the complexities of commercial insurance. We use data from industry leaders and regulatory filings to provide the most accurate estimates possible.