In this section of our website we will describe what you can expect from a NCCI, National Council on Compensation Insurance, on-site inspection of your business.
A Description of the NCCI Inspection Process:
A NCCI inspector will schedule an appointment with you for an on-site inspection. This normally occurs in the form of a letter you receive from the NCCI inspector. During the site inspection the inspector will sit down with you and discuss in detail your companys business operations, the products or processes produced including the equipment and materials used during your work processes. This information will be used to help determine the governing classification of your business. They will want to know in detail the processes you use in your business. As an example if your business is as a manufacturer you can expect they will want to know things like the sizes of metals you are using (e.g., the gauge of metals, types of metals such as bar stock, aluminum steel sheets, rods, etc.) and detailed information about the equipment you use to manufacture your product. They will request a list of equipment you are using in the process you follow to produce your product. (e.g., shears, breaks, CNC machines, plastic injection or plastic molding, stamping machines (to include the tonnage). You will be asked to provide a list of products, generally those produced within the last year, broken down by product, sales and quantities produced.
The NCCI inspector will ask about the owners of the business. They will inquire whether or not the owners are included or excluded from coverage. You may expect that even though they may be excluded from coverage, the inspector will ask for a description of their duties. For the most part, officers of a company are treated a little different than employees when it comes to classification. For example if the officer does not visit a job site or spends very little time in the manufacturing or plant area but spends most of his time in an office or performing outside sales, then NCCI may classify the officer under sales (code 8742) or clerical (code 8810).
If the officer spends a significant amount of time on the job site or in the manufacturing area or an area where there is inventory, NCCI will classify the officer under the governing classification code, defined as the class code with the most payroll or exposure other than what they refer to as Standard Exception Codes.
The inspector will then ask about your clerical staff. He'll be looking to see if they spend 100% of their time in offices physically separated from the hazards of the business. This is critical to allow them inclusion into the clerical code. If they have any reason (other than to deliver paychecks or cross through the manufacturing area other than to use the restroom), more than likely they will assign that individual to the governing class code. Clerical duties also include trips to the bank, post office and some other duties.
If your business employs a quality control department the inspector will inquire about the method you use to get the materials to those employees for testing. In order to qualify for a clerical classification the quality control personnel must not be in an area where merchandise or products are around them or working in the shop or going into the shop to pull items for testing. Without separation of work areas the quality control department can easily be included in the governing classification.
The inspector will ask for the number of employees by location and by job description. He will need to know their specific job duties, what they are manufacturing or the work process they perform, what materials and equipment they use in performing their work.
Shipping and receiving departments are normally included under the governing classification code. However, if you have an employee working in an office physically separated from the shipping or receiving department, there is a possibility the employee can be classified under clerical. However, he/she cannot have any exposure to the operations and/or inventory.
Interaction with the NCCI Inspector:
NCCI does not allow their inspectors to advise a policy holder or business owner on what class codes may or may not be assigned to their business. The reason for this is that after the inspection report is completed, there are many reviewers and specialists at NCCI that will also review the report to determine if there is sufficient information that supports the inspectors recommended classifications. If there are some discrepancies within the report or inadequate or insufficient information to support the classification recommendations or there is inadequate information to make a decision, the reviewers will direct the inspector to contact you for clarification and/or additional information.
What Happens After The Inspection:
The NCCI inspector has five working days to submit the inspection report to the reviewers at NCCI. In some cases, when an inspector is uncertain as to which classification codes to recommend, they will discuss the situation with a number of NCCI reviewers and Quality Assurance (QA) persons to get their input. Normally this takes place without the QA or reviewers discussing the inspection and results with the insured. However, in some instances, a reviewer may call the insured for additional information or clarification of facts generated by the on-site inspection. Once the inspection is completed, a report is generated and sent to the business owners insurance company for use.
How to Dispute a NCCI Inspection:
If you do not agree with the results of an inspection, you'll find there's an informal dispute resolution process available. To file an informal dispute you would need to identify and define inaccuracies found in the original inspection and provide clarification through proper documentation. An Inspector Team Leader will receive your documentation and make a review and decision. This process can be difficult for individuals to follow due to the complexity of and lack of access to code descriptions and rulings.
In the event the informal dispute does not resolve your concerns, there is a formal appeal process which can be followed.
Let Us Help With Your NCCI Inspection Dispute Appeal:
Contact our company to assist you with a NCCI inspection dispute or appeal. As simple as this process may seem, the difference between success and failure can mean the loss of significant dollars to your bottom line. When it comes to dealing with the NCCI process or for that matter any other rating authority, success is only found in the details. Experience knowing the rules, following the rules and applying the rules properly is really what counts and leads to a successful outcome. So if you find you're involved in a NCCI inspection and feel over your head call our office for help! It doesn't cost you a penny for us to review your situation.