Class Codes on Repeat
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Staffing Workers' Compensation Class Codes
One question that I frequently get asked about is previously approved class codes:
“If a particular code is already on the policy or been previously approved, why do I need approval to use it again?”
This is where a lot of confusion and frustration lies for staffing companies and understandably so. A common misconception with class codes is that once a code is approved, it’s approved for the entire policy term. Class codes are evaluated on a “per client” basis due to the complexity of the scope of work contemplated in each classification.
Not every client is alike and the scope of work that falls under one class code can encompass many different operations. The approval process for a previously approved class code can seem redundant; however, it’s necessary to ensure the proper code and exposure is contemplated.
Again, it all may seem like a “perfect match” on paper, but as well all know looks can be deceiving. The carrier class code approval forms are structured to address initial operational concerns. These forms are developed to ask the direct questions that help uncover any areas of concern for the carrier.
It’s recommended to complete these forms as thoroughly as possible to help expedite the review and approval process. Based on the information provided, there are often “gray” areas where carriers need additional details. An underwriter may request more specifics involving the client company operations, such as specific processes or actual site inspection reports. This process also helps confirm the appropriate class code is being utilized. Misclassified clients can mean major headaches down the road.
Most of all, it’s important to keep in mind that all carriers have their own list of “restricted” codes. The purpose behind the approval process for “restricted” classes is to not only help the underwriter ensure the exposure is within their underwriting appetite, but also ensure you, the staffing company, fully understand the exposure you’re providing placements for before the relationship begins.
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