'Class Codes' are specific codes used by insurance companies to categorize businesses and jobs based on the level of risk associated with them. Each class code has its own associated risk level and corresponding insurance premium rate. It's important to accurately classify your business to ensure you're paying the correct amount for insurance and are adequately covered.

For example, let's say you own a roofing business. The class code for roofing is different from that of painting or window installation because roofing is generally considered a higher-risk activity. Misclassification can lead to incorrect premium rates and potential gaps in coverage. Accurate classification ensures that you pay a fair rate and receive appropriate coverage for the risks specific to your line of work.

Understanding and correctly applying Class Codes is important for:

• Ensuring that your insurance premiums accurately reflect the risk level of your specific business activities.
• Avoiding underinsurance or overinsurance, which can either leave you vulnerable or result in a large audit.
• Facilitating smoother claims processing, as accurate class codes help insurers quickly understand and evaluate the nature of a claim.