Workers’ comp insurance premiums are based on estimated risk and exposure. Underwriters use a set of standard class codes to calculate the risk of an operation. Applying the wrong code may result in an increase in the perceived risk. For example, corporate flight department pilots should fall under the 7421 Transportation of Personnel in Conduct of Business code rather than the 7431 Aviation–Air Charter or Air Taxi–Flying Crew code.
Also, while insurers in most states use the National Council on Compensation Insurance (NCCI) codes, in some states – including California and New Jersey – a unique set of workers’ comp codes are applied. So a corporate flight department in California would use code 7424 CA&NJ Aircraft Operation–Member of Flying Crew.
This mistake can be easily overlooked, especially by companies that have pilots or crewmembers living in states other than the state where the company or flight department is based. Because worker’s comp laws differ from state to state, an employee may choose to file the claim in their home state. When underwriters determine the premium, they must be informed about all the states where the insured company has exposure through the residences of its employees.
This is usually the toughest request when looking to get new competitive work comp quotes from multiple carriers. But it will have the biggest effect on the premium discount when being applied towards the overall premium.
If you would like a free review of your worker’s compensation insurance, contact us at firstname.lastname@example.org or 1-310-453-3355.