Thursday, December 19, 2019

Roofing Estimators and NCCI Rules

I've spent years arguing that insurance companies were wrong to assign salespeople/estimators for roofing into the same roofing classification as those doing the actual roofing work, and now NCCI, the Workers Comp rating bureau in many states, has made a filing that agrees with my views.

NCCI, the National Council on Compensation Insurance, creates the classification rules used in most states for Workers Compensation insurance. And their new filing with state insurance regulators explicitly assigns such salespeople/estimators into Code 8720, the classification I have advocated for in the past for such work exposures.

In the past, the NCCI manual rules didn't really address the issue of proper classification of such estimators, but many insurance companies "interpreted" those manual rules in such a way that they would place payroll for such estimators into the roofing classification, Code 5551. NCCI itself would typically support such an "interpretation" by member insurance companies, although nothing in the actual filed manuals supported such an interpretation.

Now NCCI has officially changed this position, although the new filing isn't approved yet in all states (but is likely to be) and only makes the change on a "going forward" basis, which means that all those roofing companies who, in recent years, have been gouged by their Workers Compensation insurers via this "interpretation" will have a difficult time seeking any retroactive adjustments.

Of course, "difficult time" is not the same thing as "impossible". Stay tuned.

Monday, December 2, 2019

Today's Shock Audit email from an Illinois one man roofing company that paid a couple of thousand dollars per year Workers Comp premium for the past few years has gotten a Shock Audit for over $200,000 covering three years. Insurer is apparently coming up with some estimate of payroll that based on cash withdrawals used to pay dumping fees. Insurer is treating this as if it these withdrawals were for labor, paid under the table. Policyholder says this is not so. Insurance company is being, shall we say, less than cooperative in reducing the audit billing.

So we're going to take a look and see how much, if any, of this audit billing the insurance company is actually entitled to. Stay tuned.