Classification System Rules

Summary of classification rules and class change effective dates.

Indiana has adopted for usage the NCCI Basic Manual—2001 Edition. In Part One- Ruiles, Rule 1- Classification Assignment specifically speaks to Classification Rules.

  1. Classification System
    1. The purpose of the classification system is to group employers with similar operations into classifications so that:
      • The assigned classification reflects the exposures common to those employers
      • The rate charged reflects the exposure to loss common to those employers
    2. Subject to certain exceptions, it is the business of the employer within a state that is classified, not separate employments, occupations or operations within the business.
  2. Explanation of Classifications
    Classifications are divided into two types—Basic Classifications and Standard Exception Classifications.
    1. Basic Classifications
      Basic Classifications describe the business of an employer. This term is applied to all classifications listed in this manual, except for the standard exception classifications.
    2. Standard Exception Classifications
      Standard Exception Classifications describe occupations that are common to many businesses. These common occupations are not included in a basic classification unless specified in the classification wording. The standard exception classifications are described below.
      1. Clerical Office Employees NOC (Code 8810)
        Clerical Office Telecommuter Employees (Code 8871)

        The above classifications are assigned when all the following conditions are met:
        • The basic classification(s) wording applicable to the business does not include clerical office or telecommuting employees
        • Other rules do not prohibit the assignment of Code 8810 or Code 8871
        • The employee meets the duties, site and other requirements listed below:
          1. Duties
            Duties must be limited to one or more of the following work activities:
            • Creation or maintenance of:
              • Employer records
              • Correspondence
              • Computer programs
              • Files
            • Telephone duties, including telephone sales
            • Data entry or word processing
            • Copy or fax machine operations, unless the insured is in the business of making copies or faxing for the public
            • General office work similar in nature to the above
          2. Site
            1. Code 8810—The duties above must take place in a work station that is separated from the operative hazards:
              • Factories
              • Stores
              • Shops
              • Construction sites
              • Warehouses
              • Yards
              • Any other work areas such as:
                • Work or service areas
                • Areas where inventory is located
                • Areas where products are displayed for sale
                • Areas to which the purchaser customarily brings the product from another area for payment
            2. Work stations or service areas as described in Rule 1-B-2-a(2) above must be physically separated by:
              • Floors
              • Walls
              • Partitions
              • Counters
              • Other physical barriers that protect the clerical employee from the operating hazards of a business
            3. Code 8871—The duties above must take place in a clerical work area located within the home of the clerical employee. It must be separate and distinct from the location of the employer.
          3. Other Requirements
            1. Employees who otherwise meet the requirements for Code 8810 or Code 8871 will not be disqualified from assignment to this classification if they perform certain incidental nonclerical duties directly related to that employee’s duties in the office. These duties include:
              • Depositing of funds in a bank
              • Pickup or delivery of mail
              • Purchase of office supplies
              • Entering an area exposed to the operative hazards of the business for clerical purposes, such as delivering paychecks
            2. Employees who otherwise meet the requirements for Code 8810 or Code 8871 will be disqualified from assignment to this classification if their duties involve:
              • Outside sales or outside representatives
              • Direct supervision of nonclerical employees not performed in an eligible site according to Rule 1-B-2-a(2) above
              • Physical labor
              • Any work exposed to the operative hazards of the business, such as a stock or tally clerk, that is necessary, incidental, or related to any operations of the business other than a clerical office
      2. Drivers, Chauffeurs, Messengers, and Their Helpers NOC—Commercial (Code 7380)

        This classification is assigned to employees who perform work on or in connection with a vehicle. Messenger and courier deliveries of owned documents or goods made by foot or public transportation are assigned to the governing class code. This code includes garage employees and employees using bicycles as part of their work duties. Duties include, but are not limited to, delivering goods owned by the employer.

        Code 7380 does not apply when the basic classification wording already includes drivers. Refer to Rule 2-H for vehicles under contract.
      3. Salespersons or Collectors—Outside (Code 8742)
        1. This classification is assigned to employees who perform these duties away from the employer’s premises.
        2. This classification is not assigned to employees who:
          1. Deliver merchandise.
          2. Use vehicles to deliver or pick up goods, even if they collect or sell. These employees must be assigned to the classification applicable to the business for drivers.
          3. Use public transportation or walk to deliver goods even if they collect or sell. These employees must be assigned to the governing classification applicable to the business.
          4. Travel between locations of the employer as district or regional managers to perform various duties not involving outside sales or collection. Refer to Rule 2-G—Interchange of Labor.
        3. Code 8742 does not apply when the basic classification wording includes outside salespersons and/or collectors.
      4. Automobile Salespersons (Code 8748)

        This classification is assigned to employees who perform these duties on or away from the employer’s premises. These employees are subject to the same rules and treatment as Salespersons or Collectors—Outside.

Guidelines for Risks Impacted by Severe Weather and Natural Disasters
Refer to NCCI Circular NCCI FYI-CW-2008-06

The circular addresses the application of classifications and payroll treatment for employees and employers directly affected by weather conditions in locations that have been declared disaster areas by local, state, or federal governmental agencies.