Moving Company Workers' Comp: Codes, Peak Payroll

A moving company's workers' comp premium is built from payroll, the class codes the insurer assigns and the experience mod (a number that raises or lowers your premium based on past claims), and the seller's claims history generally follows the business to you. A mover may be rated under a trucking class (public lists show codes such as 7219, 7228 and 7229 for hauling, though their descriptions do not mention moving). Codes vary by state, rating bureau and insurer, so ask your insurer in writing how your drivers, loaders and warehouse staff are rated. This guide is for new owners who want to map their crews, plan busy-season payroll and avoid an audit surprise from helpers.

The short answer

Codes classify the business, not each job. A mover may be rated under a trucking class, but codes vary by state, bureau and insurer and the public descriptions do not mention moving, so the class your crews fall under is the insurer's call. Confirm it in writing.
Payroll on the policy is an estimate. Under the standard NCCI policy form, the insurer can audit during the policy and for up to three years after it ends, so update the estimate when summer crews come on.
Pay to helpers who have no coverage of their own can be added to your premium base at audit. The test is whether their employer lawfully secured workers' comp, and state law decides the rest.
You usually inherit the seller's experience mod (a multiplier built from past payroll and claims). Report the ownership change to the insurer within 90 days, and let the rating organization decide the effect. Whether an owner who rides the trucks is covered or excluded is a separate decision.
Rules differ by state. Four states (North Dakota, Ohio, Washington and Wyoming) run their own state funds and you must buy from them. Eleven have their own rating bureaus. In Texas, most private employers may choose whether to carry coverage. Crews on long-distance moves may work in several of these.

How do the jobs in a moving company map to class codes?

Workers' comp premium is generally a state-approved rate per $100 of payroll for each class code, times the payroll in that class, with the experience mod applied after. Under the National Council on Compensation Insurance (NCCI) Basic Manual (the version the North Carolina Rate Bureau publishes), the employer's business is classified and one main class (the governing class) applies to the location. A few narrow exception classes, such as office staff, let some employees be rated separately, but only when duties and records fit the definition. Other bureaus' rules differ.

Public lookups of NCCI-style classes list code 7219 (trucking not otherwise classified, all employees and drivers) in most states, and codes 7228 (local hauling) and 7229 (long-distance hauling) in about two dozen states each. California, Pennsylvania and Delaware use their own systems. The closest named classes are trucking classes, but none of the lookup pages for those codes mentions moving, household goods, furniture or storage. So a lookup cannot tell you which class applies to your company. Your insurer assigns it, and you can ask for the reasoning.

Moving company roles and how classification rules generally treat them
Role	What they do	How classification generally treats it	What to document
Drivers	Drive box trucks and tractors, often help load	Some manuals have a separate drivers and helpers class, but it may not fit a mover. Ask the insurer	Vehicles driven, hours spent driving versus loading
Packers and loaders	Pack, carry, load and unload	Generally follow the governing class of the business. A different job title does not move them into a cheaper class	Payroll by person and hire dates
Estimators and outside salespeople	Visit customers, write estimates	An outside salesperson exception class applies only if duties meet its definition. An estimator who also helps load is a classification question	Time records by activity
Dispatchers, schedulers, billing	Phones, routing, invoices	Clerical office staff can be a standard exception class only if duties qualify and their work area is separate from operating hazards	Job descriptions, floor layout
Warehouse staff	Receive, store and retrieve stored goods	Treatment differs by bureau. Some separate warehouse staff from the drivers who haul to the warehouse, and in other states warehouse staff may sit inside the trucking class. A separate class needs truly separate operations and payroll records. Ask the insurer in writing	Separate payroll records, physical separation
Seasonal and temporary crews	Extra loaders in busy months	Generally the same governing class as permanent crew, and their pay counts. Confirm with the insurer	Start and end dates, pay

Massachusetts, for example, says storage warehouse employees are rated separately from the drivers who haul to the warehouse, while NCCI-style trucking class names read "all employees and drivers." Splitting is strict. Under the NCCI manual as published for North Carolina, one employee's pay can be split between two classes only if records show actual time and pay in each, not estimates, and without records the pay generally goes into the highest-rated class involved. Other bureaus and states may differ. See workers' comp class codes and class code corrections.

How do you estimate payroll when the busy months swing it?

The premium you pay during the year is a deposit. The final premium is set after the policy ends from actual payroll and the correct classes, and you pay the balance or get a refund. Under the standard NCCI policy form, the insurer can audit during the policy period and for up to three years after it ends. Payroll counts wages, commissions, bonuses and paid time off. The extra pay for overtime can be left out only if records show it separately by employee. State rules vary.

If you hire extra loaders for peak months, a payroll estimate made from last winter will run low. Ask the insurer to update the estimate when headcount or pay changes, and compare actual payroll with the estimate each quarter. See payroll estimates and audit bills and premium audit.

The audit balance is owed by the named insured. In a stock purchase the company you now own can be billed after closing for payroll from before closing, so settle who bears that in the purchase agreement. In an asset purchase the audit on the seller's policy normally goes to the seller.

Pay-as-you-go plans spread premium across pay cycles but do not remove audits. A plan is tied to a specific policy and payroll account, so it does not carry over from the seller's.

What about day labor, 1099 helpers and subcontracted crews?

Under the standard NCCI policy, the premium base includes pay to the insured's own employees and also to "all other persons engaged in work that could make us liable." That is how an uninsured helper ends up on your bill. If you have no payroll records for them, the policy says the contract price may be used, and the NCCI manual as published for North Carolina applies set percentages of it (90 percent for labor-only work). Other states and bureaus may differ. This does not apply if you can show their employer lawfully secured workers' comp, and whether a helper could make your insurer liable depends on each state's law. A certificate of insurance is evidence, not the whole answer, and whether a worker is an employee or a contractor is a legal question for your attorney.

A hypothetical example. A mover's policy estimated $600,000 of payroll. The buyer hires summer loaders, and payroll on the books reaches $660,000. During June the company also pays $60,000 to helpers found through an app, treated as contractors, none with their own coverage. One helper falls from a loading ramp. The injury claim is one problem. At audit the insurer may add the $60,000 to the premium base. If the full amount is added, the base reaches $720,000, $120,000 above the estimate. A buyer who updated the estimate, collected certificates or put the helpers on payroll before the season had a different June.

Check how the seller handled day labor, because that history is inherited. See 1099 contractors and the audit bill.

Do you inherit the seller's claims history (the experience mod)?

The experience mod is a multiplier built from a company's past payroll and claims. When a business changes hands, that history usually follows the business, so you usually inherit the seller's mod, whether you buy the stock or the assets. Under current NCCI rules a recalculated mod can apply retroactively to the date of the change, up or down, and the policy requires you to report the change to the insurer within 90 days. California, New York and Pennsylvania apply their own rules, so ask your broker which bureau's rules govern your policy. The rating organization, not the insurer or the broker, decides the effect. See reviewing the mod for errors.

Are owners and officers covered?

Owners and officers are a separate decision. Whether an owner who works on the trucks, an executive officer or an LLC member is covered, or can elect to be excluded, depends on state law and the policy's endorsements. Ask your insurer and attorney what the seller did and what you want for yourself, especially if you will carry or drive on busy days, and read any exclusion terms before you accept one. See reviewing workers' comp as a new owner.

What if the crews are on a PEO or work in other states?

If the seller used a professional employer organization (PEO), its coverage does not automatically extend to a new entity in an asset purchase, and in a stock purchase the agreement's change of control terms govern. Ask the PEO and your broker in writing. See PEO or your own workers' comp.

Crews on long-distance moves may work in other states, so ask which states are listed on the policy. Four states (North Dakota, Ohio, Washington and Wyoming) run monopolistic funds, where coverage must be bought from the fund. Those funds usually do not include employers liability (cover for lawsuits tied to a worker injury), so ask about stop gap coverage, a separate policy that fills that hole. Ohio and Washington also have successor rules that can reach a buyer. Confirm what applies in your states with your attorney.

Which crew injuries should you plan for, and what do you control?

The Bureau of Labor Statistics (BLS) says hand laborers and material movers have some of the highest injury and illness rates of all occupations, with moving heavy objects and bending that may lead to sprains, strains or overexertion. It says light truck drivers have one of the highest rates too, from lifting heavy objects and automobile accidents. These are occupation statements across all industries, not mover claim data, which this guide does not have. Ask your insurer and your loss runs about stair and ramp work.

What you control is claim handling. Report injuries the day they happen, offer light duty where a doctor allows it, and train for lifting and stair carries. Return-to-work and claim cost control covers the steps. Claims from before closing still count in your inherited mod, so read the open files in the loss runs. For the pricing angle, see what drives insurance cost for a moving company.

What should you ask the insurer and the seller?

Which class or classes are our crews, drivers and warehouse staff rated under, and why?
What was payroll by class for each of the last three policy years, and how much of it fell in the busy months?
What is the current mod, and can I see the worksheet?
Which claims are open, and which came from lifting, stairs or road accidents?
How did the company pay helpers and day labor, and where are the certificates?
Were the owners or officers covered or excluded, and was the workforce on a PEO or a pay-as-you-go plan?
Which states are on the policy, and do any crews work in a monopolistic fund state?
When were the last audits, did any produce a balance, and who will report the ownership change, by what date?

A Morrow review can compare the answers with the policies, but the class assignment and the mod are decided by the insurer and the rating organization.

Keep reading

Frequently asked questions

What workers' comp class code applies to a moving company?

It depends on the state, the rating bureau and the insurer's classification, so no single code can be named for every mover. A mover may be rated under a trucking class, but the public descriptions of those classes do not mention moving. Ask your insurer in writing which class or classes apply to your crews and why.

Do I inherit the seller's experience mod?

Usually yes. Under NCCI rules the seller's payroll and claims history generally follows the business, whether you buy the stock or the assets. The rating organization decides the effect, and the policy requires you to report the change to your insurer within 90 days.

Do I need workers' comp for day laborers and 1099 helpers?

It depends on state law and how the helpers are engaged. Under the standard policy, pay to people engaged in work that could make the insurer liable can be added at audit unless their own employer lawfully secured coverage. Ask your attorney and insurer before the busy season.

What happens if I do not report the ownership change?

The rule is not framed as a fixed fine. Instead, late reporting may be treated as possible mod evasion, and the rating organization can correct the mod, sometimes back to the date of the change. Reporting within 90 days is the safer course.

Does a PEO keep my crews covered after I buy the company?

Not automatically. In an asset purchase the buyer's new entity is not the PEO's client, so it needs its own PEO agreement or workers' comp policy effective at closing. In a stock purchase the same entity stays the client, but the PEO agreement's change of control terms govern. Ask the PEO and your broker before closing.

References

Just bought a business? Get your insurance reviewed.

Send Morrow the declarations pages, loss runs and key contracts you inherited. Morrow can review them against the business you bought, flag gaps and request quotes where it makes sense. Any new terms depend on carrier underwriting.

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This article is general information, not legal, tax or financial advice, and not a coverage determination. Coverage depends on the actual policy wording, carrier underwriting, your purchase agreement and your contracts. Ask your attorney and accountant about deal and legal questions.

Moving Company Workers' Comp: Class Codes, Peak Payroll, Past Claims