A key component of audit processing is classification of the risk.  Classification changes at audit can impact the final premium and your agency’s profitability. To assist you, we have provided these helpful tools to assigning classification.

Key factors when codes 5606 and 91580 Contractors – Executive Supervisors would apply:

1.     Insured operates as a contractor.  It is used for the executive supervisors of general and specialty contractors.

2.     Executive supervisors spend majority of time in the office and/or perform outside sales and estimating.

3.     Executive supervisors do not work at the job site or directly supervise construction workers whether they are employees or temporary laborers.

4.     Executive supervisors will visit the job site to check with the site foreman or superintendent on status of projects.  There is at least one tier of supervision between the executive supervisor and the site laborers.

5.     It is a NPD (no payroll division) code and the employee’s payroll cannot be separated between other classifications.

Key factors when codes 5606 and 91580 Contractors – Executive Supervisors would not apply:

1.     Insured doesn’t operate as a contractor.

2.     Executive supervisors work at the job site.

3.     Executive supervisors instruct construction workers/employees at the job site and checks on their progress.

4.     No job site foreman or superintendent who reports to the executive supervisor.

5.     Executive supervisors hire temporary laborers and are at the job site directing them on projects.

6.     When the executive supervisor separates the payroll between time spent as an executive supervisor and time spent at the job site supervising employees or temporary laborers.  It is a NPD code.

In the state of Wisconsin, code 8601 Expediter applies to ‘paper contractors’ in lieu of code 5606.  When the insured does not have construction employees (i.e. payroll and/or uninsured temporary labor) code 8601 Expediter applies.

When codes 5606 and 91580 do not apply, the exposure should be placed in the class code based on the type of construction work performed. 

It is the job duties performed by the individual that determines classification and not the job title.  For additional clarification, contact our Audit Team at extension 2586 or your Underwriter.