Trucking Workers' Comp: Codes, Audits and the Mod

At a trucking company, workers' compensation premium is built from payroll, the class code or codes the insurer assigns, and the experience mod (a multiplier based on your claims history compared with similar employers, where 1.00 is average). The mod often follows the business to a new owner, though the rules depend on the state. Drivers, dock workers, mechanics and office staff may sit in one trucking class or in several, so start by seeing how the seller's payroll was classified and what the last audit found. This guide is for buyers of for-hire fleets who want a clean policy, payroll that matches the books and no surprise audit bill.

The short answer

Class codes classify the business and its operations, not each person's title. Many states have one trucking class, but some split local from long-distance hauling and some bureaus use different systems.
The payroll on the policy is a starting estimate. The final premium is set at audit, and a standard NCCI policy lets the insurer audit for up to three years after it ends.
Owner-operators, helpers and hired haulers can add to the audit base. Treatment depends on the lease, the facts and state law.
In states that follow the National Council on Compensation Insurance (NCCI), the seller's mod usually transfers to you in a stock purchase and in an asset purchase of all the seller's operations. A partial purchase depends on whether the insurer can split out the data. Report the ownership change within 90 days.
Texas, North Dakota, Ohio, Washington and Wyoming work differently. Check the state before you assume.

How do trucking jobs map to class codes?

Workers' compensation classifies the business, not each person's title. One main class usually covers most of your people, and a few jobs, such as true office staff, can sometimes be split out if their duties fit that class. A rating bureau (the organization that sets rules in a state, NCCI in many states and an independent bureau in others) publishes the codes, and your insurer assigns the code on your policy, so treat the groups below as things to ask about.

Job groups in a trucking company and how classification generally works
Job group	What they do	How classification generally works
Over-the-road and local drivers	Drive, inspect, secure and unload cargo	Often inside the trucking class, but confirm with the insurer's classification letter. Some states split local hauling from long-distance hauling
Dock and warehouse workers	Load, unload, sort, run forklifts	In Massachusetts's manual, platform workers who load or unload go to the trucking class. Other states may differ
Mechanics and shop staff	Inspect and repair tractors and trailers	In Massachusetts's manual, terminal, garage and repair employees are part of trucking operations. Ask how your insurer classifies them
Dispatchers, safety and office staff	Dispatch, paperwork, compliance	A clerical class can apply only if the work is clerical and the office meets the state manual's separation test. In Massachusetts the office must be physically separated from operating areas, so a dispatcher on the shop floor may not qualify
Managers and owners	Oversight, sales, sometimes driving	Depends on duties and on whether owners are included or excluded. See the paragraph below
Owner-operators and hired haulers	Haul under your authority or subcontract loads	Treatment depends on the lease, classification facts and state law. See below

Owners who drive or work in the yard. Whether an owner or officer is covered by or excluded from workers' compensation depends on the state and the business structure, so ask your broker what applies where you are based. An owner who also drives has the same road exposure as an employee driver, and one who splits time between dispatch and the shop floor may not fit a clerical class. Ask what happens if an excluded owner is hurt, and write the answer down for your lender.

Massachusetts's rating bureau, for example, assigns general trucking operations to class 7219. Other states use different numbers, and some split local from long-distance hauling. California, Pennsylvania and Delaware use different classification systems. Do not copy a code from another policy. Ask for the insurer's classification letter, and ask whether trucks that haul your own goods are classified differently. See workers' comp class code corrections and the class code glossary entry.

How are payroll estimates and audits handled?

Premium is a state-approved rate per $100 of payroll for each class, added up across classes and multiplied by the mod. For a fleet, the payroll on the policy is only a starting estimate. After the policy ends the insurer audits actual payroll and classes, and the standard NCCI policy allows that audit for up to three years afterward, so you pay the balance or get a refund long after the trucks have rolled.

Premium payroll generally includes wages, commissions and bonuses, so per-mile pay and bonuses count, while some qualifying expense reimbursements are excluded. Ask the auditor how each pay component is treated. Drivers who cross state lines still have their payroll assigned to a state for premium. Massachusetts's manual, for example, generally assigns driver payroll to the state of the base terminal. Ask your insurer how it assigns payroll for drivers who run several states. A dispatcher or helper can be split between two classes only if records show actual time and pay in each. Otherwise all of it generally goes into the highest-rated class.

A hypothetical example. After closing, an auditor finds a dispatcher who works mostly on the shop floor and two helpers paid outside payroll. Using made-up round rates of $0.50 per $100 for the clerical class and $5.00 per $100 for the trucking class, the dispatcher's $60,000 of pay moves from about $300 of premium to about $3,000, and the helpers' $40,000 adds about $2,000, for roughly $4,700 more before the mod. The rates are invented, not a quote. Records and duties drive the result, and in a stock purchase the audit can reach into the seller's period. See payroll estimates and surprise audit bills and the premium audit glossary entry.

What about owner-operators, helpers and hired haulers?

The standard workers' compensation policy counts pay to all other persons engaged in work that could make the insurer liable. Without payroll records for them, the contract price can be used, and some bureaus apply default percentages of that price, so ask your insurer what applies. A hauler without workers' compensation of its own can have its charge added to your audit as if its drivers were your employees.

A certificate of insurance from the hauler helps your audit file, but a certificate is not the policy. Ask the insurer what it accepts as proof, and whether the hauler's own workers were covered by a policy that actually applies.

Whether an owner-operator under your authority is an employee, an insured subcontractor or an exempt contractor depends on state law and the facts. Federal lease rules say your control of the equipment does not by itself decide whether a driver is an employee or an independent contractor, and the federal wage and hour independent contractor rule (under the Fair Labor Standards Act), whose current status is worth confirming, says that labeling a worker a contractor does not settle the question. That test does not decide workers' compensation status, which is set by state law. Read the inherited leases and settlements and ask an employment attorney. See 1099 contractors and the audit bill and coverage gaps new owners find.

What happens to the mod and the policy when you buy?

You usually inherit the mod in NCCI states, even in an asset purchase. A new limited liability company does not start at 1.00 when the seller sells all its operations. The claims that built a fleet's mod often come from driving incidents and dock work, so read them before you assume it will fall. A partial purchase of some trucks and lanes depends on whether the seller's insurer can split out the data. Report the ownership change to the insurer within 90 days, whether or not a mod applies. Under current NCCI rules a recalculated mod applies back to the date of the change, up or down, and late reporting can lead to corrected, even retroactive, mods. The rating organization decides, not your broker.

The policy itself does not simply pass to you. Policy rights cannot be transferred without the insurer's written consent, so an asset buyer needs its own policy at closing, while in a stock purchase the company's policy and any audit balance stay with the company. If a professional employer organization (PEO) ran the seller's payroll, ask who covers your drivers on day one. See how to check your experience mod for errors and PEO versus your own policy.

State systems differ:

Texas lets most private employers choose whether to carry workers' compensation.
North Dakota, Ohio, Washington and Wyoming use a state fund, not private insurers. Washington and Ohio have rules that can make a buyer answer for a seller's unpaid amounts. Work based in these states is generally covered through the state fund, not a private policy, so if drivers or terminal staff are based there, ask how fund coverage and stop-gap employers liability coverage are handled, and how drivers who only run through these states are treated. If you buy a business with staff based in Washington or Ohio, ask deal counsel about the notice and clearance steps with the state fund before closing.
Independent bureau states such as New York, California and Pennsylvania have their own ownership rules. Ask deal counsel about the state where your drivers are based.

How should you read the loss runs for injury causes?

Sort the loss runs by cause, because a fleet's claims often come from a few sources: driving incidents, loading and securing, climbing in and out of cabs and trailers, and shop work. The Bureau of Labor Statistics (BLS) reported 2.9 work injury and illness cases per 100 full-time workers in truck transportation in 2024, against 2.3 for all private industry. If a dock or cross-dock runs forklifts, ask for operator training and evaluation records, which federal rules require at least every three years. See return-to-work programs and claim cost.

What should you ask the insurer and the seller?

What classes are on the policy, and can I see the classification letter and the last audit?
How was payroll split between drivers, dock, shop and office, and what records support the split?
Which haulers and owner-operators were included or excluded, and where are their certificates and leases?
What is the current mod, what claims drive it, and was the ownership change reported?
Who covered the workforce before closing, and when does my own coverage start?
What does state law require where the drivers are based?

Morrow can review the policy, audit and loss runs, flag classification questions and request quotes, with terms set by the carrier and the rating bureau. For the core stack, see what insurance a new trucking company owner needs.

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Frequently asked questions

What workers' comp class code does a trucking company use?

Many states have a general trucking class that covers drivers and, in some manuals, terminal and repair employees. Some states split local from long-distance hauling, and California, Pennsylvania and Delaware use different systems. The insurer assigns the code, so ask for its classification letter.

Do I inherit the seller's experience mod?

Usually, in states that follow NCCI. A new company does not start at 1.00 if it buys all of the seller's operations, and a partial purchase of some trucks and lanes depends on whether the insurer can split out the data. Independent bureau states have their own rules. Report the ownership change to the insurer within 90 days.

Are owner-operators covered by my workers' comp policy?

It depends on the lease, the facts and state law. The audit base can include pay to others whose work could make the insurer liable, and uninsured subcontractor charges can be added. Ask the insurer and an employment attorney, and collect each hauler's certificate.

Can an audit bill me for payroll from before I bought the company?

In a stock purchase, the company keeps its policy, so a post-closing audit of the policy year can include the seller's period. In an asset purchase the balance usually stays with the seller on the seller's policy. The purchase agreement decides who bears it economically, so ask deal counsel.

Does a dispatcher count as clerical for workers' comp?

Only if the duties and workspace fit the clerical class. In Massachusetts, for example, the office must be physically separated from operating areas. A dispatcher working on a shop floor may not qualify, so ask your insurer how it classifies yours.

References

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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.

Workers' Comp, Payroll and Class Codes for a Trucking Company