top of page

Right OR Rip-Off? What do you think?

Updated: Jan 5, 2022

Below is an actual email exchange between a client and his insurance company auditor regarding a reclassification. Who do you think is right?

Insurance company to their insured:

It appears that you have reported [Bob Smith's] payroll under the clerical class. The auditor moved his payroll to the [Machinery Mfg.] class because he has some shop exposure. This reclassification has generated an additional premium of $6,146. Please report his payroll under [Machinery Mfg.] going forward.

Insured To Insurance Company:

[Bob] is clerical only. He has no tools and does not work on any equipment. He spends nearly all his time in his office.  He truly operates a phone, processes work orders, orders parts, maintains customer service, etc. The only time he’s in the shop is to check status of a job, give a mechanic a change order, etc. Period. Please change immediately.

Insurance company to their insured:

Managers and Supervisors would be assigned to the class code depending on the work that they are overseeing. So given that the employee is a shop manager and supervising shop employees [Machinery Mfg.] would be the proper code. I am referring to someone directly supervising/managing employees. In order to be classified 8810 you have to be separated from all of the operations 100% of the time.

I'll give you a little more information. This particular reclassification was the result of a phone audit rather than a physical audit. And, it was triggered by the employee's title, Shop Manager.

This is the point in the story when my phone rings and the insured requested my assistance. What do you think?

  • Has this ever happened to you?

  • Is the insurance company auditor right? 

  • Do you need further information?

  • What questions would you ask?

I know how this turns out of course, but I'm genuinely curious about your thoughts. Events like this are similar to many others (sometimes the reclassification or reallocation of entire departments) that lead to the numerous calls and emails we receive for assistance. Also, regarding reclassifications, Class Code 8810 (Clerical Office) is more often than not the code that's creating the confusion.

Stuart Cytron, MBA has been published in trade journals such Construction Forum St. Louis and St. Louis Business Journal among others. You can read more about Stuart and how he developed a passion for helping businesses reduce work comp expenses on his website.

30 views0 comments


bottom of page