Misclassified codes to high-cost claims to workplace violence: big risks for employers

Top ten workers comp codes that agents and employers get wrong

NCCI conducts a Classification Inspection Program (CIP) in all NCCI states, selecting a statistically reliable sample of businesses to monitor the accuracy of classifications. A key component of the program is to conduct inspections of a policyholder's operations to determine whether the governing classification code or other classification code(s) identified on the policy reflect the current business operations. NCCI released a report showing the top 10 reclassified governing codes and the top code to which they were assigned based on 2022 - 2024 data.

Interestingly, Code 7380-Drivers, Chauffeurs, Messengers, and Their Helpers NOC-Commercial, which was not in the prior top ten list, emerged as number one. Over one-half had the governing code changed to a mercantile code, including 8018 (wholesale store) and 8010 (hardware store). While rates will vary because states set them, code 7380 usually has a higher rate than mercantile codes, because driving jobs are considered riskier than wholesale or hardware store employees.

Similarly, the second-highest reclassified code, Code 8292 Storage Warehouse NOC, was most often reassigned to a mercantile classification code, with Code 8018 Store Wholesale NOC the most common reassigned code. "When a mercantile business operates a warehouse exclusively for handling, storing, and distributing its own products, that facility is considered an extension of the business itself. As such, it is not separately classified to a warehousing code." For some employers, this could mean a lower premium, since mercantile risk is lower than pure warehouse exposure.

Takeaway: Most errors occur when business operations evolve, or acquisitions or mergers take place, and classifications are not updated. Employers must accurately describe their business's main activities and detail the types of jobs their employees perform and keep agents abreast of changes. Incorrect codes can lead to higher premiums or insufficient coverage and penalties.

Managing high-cost and shoulder injuries

A new study by the Workers Compensation Research Institute (WCRI) examines the key factors associated with high-cost workers compensation claims involving back and shoulder injuries, where medical expenses exceed $65,000 within 36 months of injury. The study looks at four back conditions (neurologic back pain, disc disorders, degenerative back conditions, and sprains, strains, and non-specific pain) and three shoulder injuries (rotator cuff disorders, frozen shoulders, and shoulder osteoarthritis).

Key findings:

• Degenerative back conditions are among the costliest, averaging $120,000 in medical and indemnity payments
• A back or shoulder claim involving a degenerative condition is 58 percent more likely to be classified as high-cost, whereas only one percent of sprains and strains became high-cost claims
• Back surgery increased the likelihood of high costs by 8-9 times compared to non-surgical cases
• Mental health comorbidities increased the likelihood of high-cost by 60 - 70 percent
• Delayed intensive medical intervention (starting after one year of treatment) was 25 times more likely to become high-cost and was the single most significant predictor of high-cost claims-across all seven injury types
• When the initial provider continued delivering most services claims were significantly less likely to become high-cost cases. If surgical care remained within the same provider organization, high-cost odds were reduced by 62 percent

Takeaway: Medical care timing and coordination have a major impact on the costs of a claim, making case management as crucial as treatment type. Degenerative and comorbid conditions, including mental health, should be identified at the onset as they elevate risks significantly.

What the 2025 workplace violence survey means for employers

Online compliance training provider Traliant commissioned a survey of more than 1,000 workers in industries including hospitality, healthcare, and retail to assess how employees experience and perceive workplace violence and safety.

Key findings:

• Workplace violence appears to be increasing - 30 percent of respondents reported they had witnessed workplace violence happen to another employee (up from 25 percent in 2024), and 15 percent said that they had been the target of workplace violence themselves (up from 12 percent in 2024)
• 46 percent of hospitality workers report witnessing workplace violence, highlighting heightened exposure in this industry sector
• 75 percent of employees report receiving workplace violence prevention training, up from 70 percent in 2024, but nearly 90 percent of employees feel their employer isn't doing enough to ensure safety
• Only 60 percent of employees say they would report safety threats without the guarantee of anonymity
• There are significant disparities among age groups in confidence levels to deescalate violent situations: Baby Boomers - 58 percent, Gen-X -54 percent, Millennials - 47 percent and the least confident, Gen-Z - 41 percent

Takeaway: Employees want a workplace where safety is visible, multi-dimensional, and ingrained in daily life. In response, employers should establish anonymous reporting channels, foster open conversations, and promote a speak-up culture. Recognize the generational differences in de-escalating skills and bridge the gap with specialized training for Millennials and Gen Z with engaging realistic scenarios and tailored training for specific roles. Reassess protocols and readiness and regularly demonstrate the commitment to a safe workplace through visible plans, tools, and drills.