Commercial Insurance Audit’s Classifications
Hey everyone!! In this final video, we will discuss classifications. As we mentioned earlier, the auditor will be looking for a description of your business operations, as well as job descriptions for each of your employees. One of an auditor’s primary tasks is to make sure that the insured business is properly classified. The auditor will review your company’s operations to determine whether the basic classification listed on your policy is correct.
The basic classification is the classification that best describes your overall business. For example, suppose that you operate a machine shop. Some of your employees work with lathes while others operate drill presses or stamping machines. The specific activities performed by your employees may vary from worker to worker. Yet, they all fit your basic classification of Machine Shop.
Some employees may perform tasks that require separate classifications. For example, your machine shop employs a clerical worker who performs his job in an enclosed office away from other workers. This employee would likely be assigned the classification of Clerical Office Employee rather than Machine Shop.
Workers’ compensation classification systems are assigned and governed by the Pennsylvania Compensation Rating Bureau and auditors are simply confirming that your operations continue to fit in the assigned classification. Your auditor may let the insurance carrier know that your business is misclassified, and, in that event, the carrier would open a request with the PCRB to dig a little deeper. If your business changes or you do not agree with your classification, contact us, your agent, and we can assist in an appeal.
We hope that this video series about workers’ compensation audits was informative. As always, we love to answer your questions and hope that you reach out to us for any of your insurance needs.
