HVAC Workers’ Comp Class Code: A Complete Guide
Class codes play a key role in determining your insurance premiums. Understanding the HVAC workers’ comp class codes ensures that your business is covered adequately and avoids any surprises when it comes to your insurance rates.
What are Class Codes and why are they important?
If you operate an HVAC business and have shopped for workers’ comp insurance, you’ve probably come across the term "class codes".
Class codes are like barcodes to easily reference information on different jobs and industries. Each code is a simple four-digit number that is assigned to a specific job role. It also includes a job description and a risk rate.
The National Council on Compensation Insurance (NCCI) manages this information and updates the risk ratings once a year based on recent claims data.
These risk rates are based on every $100 in payroll. For example, if your insurance rate for class code 5537 is $3.00, that means a payroll of $100,000 would have a base insurance premium of $3000.
Common HVAC Workers’ Comp Class Codes
HVAC Class Code 5537
Code 5537 is the most common code used for HVAC technicians workers’ comp. This code is considered all-inclusive because it tends to cover a majority of work performed by HVAC employees even if they each perform slightly separate individual duties while on the job.
If an employee performs any of the following tasks, they will fall under code 5537 for HVAC work.
- Service, repair, or installation of forced heating and air conditioning systems
- Refrigeration and cooling systems (if connected to the building HVAC system)
- General HVAC services
- HVAC contractors
5537 is also the workers' compensation code for HVAC helpers or others who may be assisting HVAC technicians while on the job site.
Other employees, such as clerical workers or in-office customer service individuals, will fall under non-industry codes that are unrelated to HVAC work.
Kickstand Tip
If your business only performs duct cleaning or has employees who only perform duct cleaning, those employees are classified under NCCI code 9014. This rate is generally lower than the standard HVAC rate.
Businesses that only service portable air conditioning units should use code 9519 in most states. This NCCI code is specific to portable AC service and installation work and doesn’t cover standard HVAC work.
HVAC class code 3724
Some heating and refrigeration systems are not connected to a building’s HVAC system. This is common in restaurants, bars, or other similar locations.
In these cases, you will use NCCI code 3724 for your employees.
Understanding state-specific HVAC codes
We mentioned earlier how workers' compensation class codes for HVAC can sometimes vary from state to state. This variance can create confusion for many business owners who may be unsure which codes to use when researching quotes.
Here are a few examples of state-specific codes:
Class Code 0664 - Pennsylvania and Delaware
In Pennsylvania and Delaware, class code 0664 is commonly used for HVAC work, covering installation, service, and repair of heating, ventilation, and air conditioning systems.
Class Code 5550 - Michigan
In Michigan, class code 5550 is designated for HVAC contractors.
Class Code 5538 - New Jersey and California
In New Jersey and California, class code 5538 is for installation and maintenance of HVAC systems.
Class Code 5536 - New York and Texas
In New York and Texas, class code 5536 is used for HVAC work, including the installation and repair of systems.
Non-industry class codes that may apply to your HVAC business
As an HVAC business, you may have employees who don’t work directly on HVAC systems. These other employees will still need workers’ comp insurance in most states. However, you’ll use a non-industry code for these workers.
Clerical code 8810
This code is for office staff at your HVAC business that perform clerical duties. This code has a much lower rate so your premiums will be cheaper if you utilize it.
Salespeople may also be classified under code 8810 if they remain in the office. If salespeople drive to various job sites or provide inspections or estimates, they will use a different code depending on the state.
How do Class Codes affect Insurance Rates?
Class codes indicate how risky a specific job is. Insurance companies use these rates to calculate the cost of a workers' compensation policy. Jobs with higher risks will have more expensive policies to cover those potential injuries.
The average cost for workers’ comp insurance using code 5537 is $3.14 per $1000 of payroll. Your specific rate will vary based on your state, with rates from selected states shown in the chart below.
HVAC (Class Code 5537) Rates per State - 2024
Remember that these are the starting rates that your insurance premiums are based on. Each HVAC business can pay a different final premium based on unique risk factors.
To determine your final premium, your insurance carrier will use your experience modifier, or ExMod. This is a number based on your previous workers’ comp claims and costs.
For example, if your experience modifier is .95, your rates are multiplied by this number which results in lower-than-average costs compared to similar HVAC businesses.
Any experience modifier above 1 means you are paying a higher rate. This is why it’s important for HVAC companies to implement strategies that help them reduce workplace accidents and bring workers back to work sooner after they’ve been injured.
Curious about how these rates translate into costs for your business? Check out this Guide to HVAC Workers’ Comp Rates for more details.
Find the lowest workers’ comp insurance for your HVAC business
To find the lowest rate in your state for HVAC workers’ comp insurance, you need to partner with a company that fully understands the HVAC industry.
At Kickstand, we work with HVAC firms large and small from all around the country. We know the unique aspects of your industry and can help you reduce your workers’ comp insurance while still maintaining the coverage you need to be fully compliant and protected.
Get your free HVAC quote today at Kickstand to start saving on your workers’ comp insurance. There’s no obligation or risk and the quote is completely free.
Note: The information provided in this blog is intended for general informational purposes only and is not a substitute for professional legal or insurance advice. Laws and regulations regarding workers' compensation insurance are complex and vary by state and by specific circumstances. Therefore, readers are encouraged to consult with a qualified legal or insurance professional to obtain advice with respect to any particular issue or problem they might have.
Mordechai Kamenetsky, co-founder and lead agent of Kickstand, is recognized as an expert in workers' compensation. He is passionate about helping small businesses manage risks and lower their workers' comp costs. In his articles, he educates readers and clients on the intricacies of workers' comp insurance.
The question people ask us most often is, “Does my business need workers comp?” This often leads to the second-to-most frequently asked question: ”Do owners need workers comp?”
