The workers’ compensation class codes are used by insurance companies to understand the types of work their customers do. In this way, companies can categorize work areas according to the level of risk estimated. Workers’ compensation cost can thus be precisely determined by insurance companies.

Workers’ compensation insurance rates are based on NCCI’s classification system, which contains more than 800 unique class codes. The National Council on Compensation Insurance is referred to as NCCI. States and insurance companies rely on them for statistical data.