The Importance of Workers Compensation Code Classification

The National Council on Compensation Insurance (NCCI) currently utilizes over 700 class codes. These four digit codes represent the specific work duties and job classifications assigned to each employee. Code classifications contain detailed descriptions of work and represent the hazards associated within the process of their job duties.

For Example
Class code 8810 is for clerical employee who work at computers. This employee faces less risk of injury compared to a carpenter that performs work on upper stories (class code 5403) because there are less hazards associated with desk jobs than construction of buildings. Because of this difference the workers compensation rates differ from class code to class code.

The Importance
Correctly classifying employees is an important part of the workers compensation insurance quoting and risk management process. If employees are misclassified businesses may end up paying higher rates or risk owing additional premium after an audit. Classification codes are complicated and proper assignment is critical to have the correct premium charged for a workers comp policy.

Every state uses a different set of class codes from various state rating authorities. Each of these codes comes with distinct rating which factors into the premium calculation. With so many class codes to choose from it’s easy to see how misclassification errors can occur.Under state law businesses are obligated to accurately report the duties their employees perform. Improperly coding employees will be discovered during annual insurance audits, and purposefully misrepresenting employees duties can be considered fraud resulting in fines or even prison time.

Help with Workers Compensation Class Codes
When employees roles and duties change their workers compensation class code must also be adjusted. Some carriers allow for employees to split class codes based on their diverse duties but check with your insurance agent before doing so. The NCCI manual can be consulted to find the correct workers comp class codes.

Workers Compensation Insurance can be confusing terrain. Contact one of our agents today for a no cost assessment of your business insurance needs.

7 Brewery Insurance Policies to Consider

Over the last decade or so microbreweries, craft breweries and brewpubs have exploded coast to coast. Today, there are more than 2,300 breweries and brewpubs in the U.S.

There are a number of risks brewery owners and managers face manufacturing and selling beer. The specific insurance needs of each brewery are unique depending on the size and scope of your brewery operations (craft brewery, microbrewery, large brewery, tap room, brewery tours, on-site events, etc).

Just like brewing stouts, lagers and ales takes careful planning and execution, adequate brewery insurance requires purposeful risk management and consultation to properly manage unexpected events that may cause damage to property, injury to customers or employees, or interrupted production. Consider the following circumstances:

• A batch is contaminated or spoiled and must be destroyed or removed from the marketplace.
• A customer is involved in an alcohol-related car accident after leaving your tasting room or brewpub.
• Vital equipment or machinery unexpectedly breaks down, leading to property damage, loss of inventory or product, and extended downtime.
• A customer, vendor or delivery person slips, trips, or falls on your property.
• Guests on your property damage equipment or other business property.
• Unfinished or completed beer leaks or spills from a storage tank.
• Weather events, fire, theft, or vandalism damages or destroys your building(s) and its contents.
• Beer in storage or in transit is damaged or destroyed.

Brewery Insurance Policies to Consider:

Business Property
Brewery Business Property Insurance can pay for damages to your building, equipment and inventory relating to fire damage, weather events, vandalism, theft and other covered causes. This coverage can also include coverage for the interruption of your brewery to cover ongoing expenses and lost income if your operations are paused because of a covered loss. Business Property coverage can be designed to cover inventory, machinery, brewing equipment, furniture, fixtures, computers and any other business property at your locations.

General Liability
General Liability Insurance for Breweries can cover third party property damage and bodily injury claims. For example, if a guest in your taproom slips and falls your Brewery General Liability Insurance can pay for the medical expenses, attorney fees, court costs and any judgements or settlements. This coverage can also cover claims for product liability or advertising liability.

Commercial Auto
Commercial Auto Coverage can protect the vehicles owned by your brewery and the liability claims arising from your brewery’s auto use. If one of your employees is driving a delivery van around town and is in accident sending the other driver to the ICU your brewery is on the hook for that claim. You also can be held liable for claims related to employees driving their personal vehicles for business purposes. In this case you’d need hired and non-owned auto liability insurance to cover the claim. Commercial auto claims can be very expensive, it’s important to ensure you have the property Brewery Commercial Auto Coverage.

Workers Compensation
If you have brewery employees you are required to carry Workers Compensation insurance. This coverage covers the cost of work-related injuries and illness as well as settlements arising from employee injury claims. The cost of this coverage per employee varies significantly based on the duties, or class code, and payroll of each brewery employee.

Equipment Breakdown
This coverage, also known as boiler and machinery coverage, is essential for a brewery because your machinery and equipment are very expensive. If something breaks it can take weeks or months to fix it. Would you be able to continue operations if a significant portion of your production was stalled while waiting for replacement machinery? This coverage can pay for the costs to fix sudden and accidental breakdown and reimburse you for any related business interruption costs.

Liquor Liability
This coverage is required for any establishment that sells, services, or furnishes alcoholic beverages. It can pay for property damage and bodily injury that results from negligent selling or serving alcohol. This is legally required if you serve alcohol on your premises.

Employment Practices Liability
EPLI protects you if a current or former employee sues you for discriminatory employment practices such as failure to hire, failure to promote, sexual harassment or other discriminatory practices. In recent years there has been a significant increase in claims related to employment practices. Even if the claim is false your brewery is responsible for covering the legal defense costs relating to the claim. These costs are often in the tens to hundreds of thousands of dollars.

While we’ve addressed many of the exposures in the brewery industry, there may be more risk your brewery faces. Talk to one of our brewery insurance specialists today to learn more.

Will Aufhammer

[email protected]

(626) 463-5101

4 Ways to Save on Brewery Workers Compensation Insurance

“What are workers compensation rates and where do they actually come from?” is a question we often hear when assisting start-up breweries. Even established brewery owners and managers ask this question. Let’s face it, your job is to make fantastic beer not to understand the nuances of insurance.

Breweries may not know or remember how these costs can be managed or perhaps even decreased to improve profitability. Here are four important steps you can take to lower your workers compensation premiums.

1. Safety is crucial.
Having a brewery safety plan or employee safety training manual is important. Keeping your employees safe and minimizing injuries leads to cost savings over time. Breweries with past employee injuries and claims end up paying higher premiums in subsequent years. There are plenty of resources available to you to make this simple. While OSHA is always a good stop, as are fellow breweries, here is a favorite:

2. Have a return to work program.
No employee should be forced to come back to work prematurely after an injury, but if your brewery has a formal method for having injured workers get the treatment they need to get better, the sooner they can get back on the job. The sooner your employee returns to work the smaller their workers comp claim ends up. We support employees receiving the medical attention and recovery time they need. But a return to work program for your brewery will help you help your employee return in a safe and timely manner.

3. Check what class codes your employees are working under.
If you have employees that do multiple jobs—such as an assistant brewer that also tends bar (I’m guessing you might!), you may be eligible for Labor Distribution, which allows the multi-tasking employee to have their hours at each specific job to be properly attributed. This is essential because a brewer’s workers comp rate is typically triple that of a bartender. You may be overpaying premium based on a small oversight.

4. Ask for pricing help!
If you have been in business for a few years and have little or no losses on your workers’ compensation policy, ask your agent to see what he/she can do to get you a better deal.

Most importantly, we encourage you and your staff to remember the all for one, one for all supportive and typically collaborative nature of the brewing industry. Safer breweries mean fewer work comp claims. Fewer claims means lower rates… for everyone.

If you’re looking for low cost brewery workers compensation insurance click here or contact [email protected]