Plumbing Workers’ Comp Code: A Complete Guide
Class codes play a key role in determining your insurance premiums. Understanding the plumbing 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’ve looked into workers' comp insurance for your plumbing business, you’ve probably heard of “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) creates these codes and updates them every year based on claims data. Your rate is based on every $100 of payroll.
For example, if you did lawn sprinkler installation, your class code is 5183 with a rate of $2.19. If your payroll is $100,000, you would have a base premium of $2,190.
Common Plumbing Workers’ Comp Class Codes
Plumbing Class Code 5183 - Plumbing & Lawn Sprinkler Installation
Code 5537 is the most common code used for plumbing workers’ comp, and it also covers the installation of lawn irrigation systems. This code applies to businesses primarily engaged in installing, repairing, and maintaining water, gas, and steam piping systems.
Whether the work is done in residential homes or commercial buildings, it includes services like the installation of faucets, sinks, toilets, and equipment such as hot water heaters and refrigerator water lines.
Plumbing Class Code 5188 – Indoor Automatic Fire Sprinkler Installation
Code 5188 applies to businesses that specialize in installing fire suppression systems inside buildings. This includes setting up indoor automatic sprinkler systems, typically used in commercial or industrial buildings to prevent fire hazards.
Plumbing Class Code 8111 – Plumbing Supply Dealers
Code 8111 applies to businesses that deal primarily in the wholesale or retail sale of plumbing supplies. These businesses aren't involved in the actual installation of plumbing systems but rather supply essential materials and equipment for contractors.
State-Specific Plumbing Class Codes
Workers’ compensation class codes can vary depending on the state you're operating in. For example, in Pennsylvania and Delaware, class code 0664 is commonly used for a range of plumbing services.
Non-industry class codes that may apply to your plumbing business
For plumbing businesses, you might have employees who don’t work directly on plumbing jobs but still need workers' comp insurance. These employees, like office staff, will fall under a non-industry code.
One common code is 8810, which applies to clerical workers. This code usually comes with a lower rate, meaning you'll save on your insurance premiums if you use it for your office staff.
Average Workers’ Comp Rates for Plumbing Class Code 5183
Below are the average plumbing workers’ comp rates for selected states:
How do Class Codes affect insurance rates?
The higher the risk of a job, the higher the workers' comp rate. For example, class code 5183 (plumbing work) typically has a higher rate at $2.19 per $100 of payroll because it involves more physical labor and risk.
In comparison, class code 5188 (indoor fire sprinkler installation) is less risky, with a rate of $1.87. And if you run a plumbing supply store (class code 8111), which involves less physical work and risk, the rate drops even further to $1.14.
But class codes aren’t the only thing that affects your rate. Your rate also depends on your experience modifier (ExMod), which is based on your company’s claims history.
Understanding ExMod
An ExMod is a number that shows your business’s likelihood of injury compared to other similar business. A business with average risk is 1.0.
A lower ExMod (less than 1.0) means you’ll pay less than the average business. For example, if your ExMod is 0.95, you’ll get a discount on your rate, paying less than the base rate for your class code.
On the other hand, if your ExMod is higher than 1.0, you’ll end up paying more. If your ExMod is 1.05, that’s 5% above the base rate, meaning your premiums will increase.
Curious about how these rates translate into costs for your business? Check out this Guide to Workers’ Comp Rates for Plumbers for more insights.
Find the right Workers' Comp Rates for your Plumbing Business
Navigating workers' comp rates can be complicated, but it doesn’t have to be. Kickstand Insurance specializes in helping plumbing contractors like you find the lowest rates for your workers' comp coverage without sacrificing essential protections.
Get a free plumbing workers’ comp quote today from Kickstand Insurance and see how much you can save.
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.
Legally, workers’ comp is not needed for 1099 employees. However, if the employee lacks coverage, you may be held liable in case of injury. Also, if a state or federal authority determines your 1099 workers are not in fact independent contractors, they must be reclassified as employees. That also means you’re required to provide them with workers’ compensation insurance.
