Workers' Comp 8742 Salespersons


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Workers Compensation Insurance for 8742 Salespersons—Outside: A Deep Dive into Coverage, Classification, and Risk


When it comes to workers’ compensation insurance, one size does not fit all. Different occupations present unique challenges, risks, and responsibilities—and insurers account for these differences through classification codes. One of the most distinct and commonly misunderstood codes is 8742, which pertains specifically to outside salespersons.


These professionals occupy a unique space in the workforce. Though they are not tied to physical labor in the way construction workers or warehouse employees are, they are still exposed to on-the-job risks that necessitate proper insurance coverage. Understanding what workers’ compensation means for businesses employing salespersons classified under code 8742 is essential for both compliance and risk management.


Understanding Classification Code 8742: Who Are Outside Salespersons?


The classification code 8742 applies to employees whose primary duties involve sales conducted away from the employer’s premises. These workers are typically engaged in activities such as visiting clients, meeting prospects, demonstrating products, and securing contracts—usually offsite, whether on the road or at the customer’s location. They may operate in a broad spectrum of industries, from pharmaceuticals and medical equipment to industrial machinery, software services, or even insurance.


What sets these employees apart from inside sales or administrative staff is the fact that they perform the majority of their work in the field, often traveling extensively. As a result, they are not subject to the hazards of a factory floor or construction site but instead face the risks associated with commuting, public interaction, and variable environments.

The National Council on Compensation Insurance (NCCI), which standardizes classification codes in many states, defines 8742 as a low-risk class. However, "low-risk" does not mean "no-risk," and that’s where workers’ compensation insurance comes into play.


Why Workers’ Compensation Insurance Is Necessary for 8742 Salespersons


Workers’ compensation insurance is designed to protect employees who suffer work-related injuries or illnesses. While some business owners assume that salespeople who don’t work in dangerous environments are unlikely to file a claim, the reality is that outside sales professionals face distinct exposure that can still result in costly claims.


Salespersons who spend their day driving to appointments are at risk of automobile accidents, arguably the most significant hazard for this classification. Whether it’s a rear-end collision while commuting or a fall in a client’s office building, the nature of their job requires them to be in environments that are not under the employer’s control. Slips, trips, and falls in parking lots or stairwells, dog bites at residential visits, or even injuries sustained during business lunches can all be considered compensable under workers’ compensation laws.


Moreover, in many states, car accidents that occur while driving for business purposes—even if in the employee’s personal vehicle—are covered under workers’ comp. This underscores the importance of having the proper insurance in place to manage these liabilities.


Common Claims Filed by 8742-Classified Employees


Though the risks are generally less severe than in higher-risk jobs, the types of injuries outside salespeople may suffer can still be disruptive and expensive. Some of the most common claims include:


  • Automobile accidents: These can lead to whiplash, fractures, head trauma, or back injuries. Since these workers spend much of their time on the road, motor vehicle collisions represent the greatest single source of serious claims in this category.
  • Slip and fall injuries: A salesperson might trip on uneven pavement outside a client’s building or fall while navigating unfamiliar office environments. Sprained ankles, broken wrists, and concussions are frequent outcomes.
  • Repetitive stress injuries: Carrying laptops, product samples, or heavy promotional materials on a daily basis can lead to shoulder and back strain over time.
  • Stress-related conditions: While harder to prove, sales roles can be mentally demanding. High quotas, rejection, and long hours on the road may contribute to work-related stress, which—depending on the state—may be compensable under certain conditions.


These claims highlight that the work environment for outside sales reps, while not inherently hazardous, still demands proper risk management through workers’ compensation.


How Insurers Assess Risk and Set Premiums for Code 8742


When insurers calculate workers' compensation premiums, they rely on a few core factors: the classification code, total payroll, and the company’s claims history, often measured through the Experience Modification Rate (EMR).


For classification 8742, the rate per $100 of payroll is considerably lower than high-risk codes such as those for construction workers or machine operators. However, premiums can still vary widely depending on the insurer's underwriting criteria and the employer's loss history.


The EMR plays a pivotal role. A business with a poor claims history—perhaps due to a rash of vehicle-related incidents—might find itself paying significantly more than a competitor with a clean record. Thus, even in lower-risk roles, the emphasis on safety training and preventive measures remains critical for cost control.


Some insurance providers may even delve into the specifics of how sales teams are managed. For instance, do employees use their own vehicles or company cars? Are there GPS tracking systems in place? Does the company maintain driving records? These elements can impact how underwriters evaluate the risk associated with a given policy.

Why Workers’ Compensation Is Still Essential for 8742 Employees


The assumption that outside salespeople face negligible risk can lead employers to neglect appropriate coverage. However, that mindset can be a costly oversight. Even if a salesperson works from home or spends most of their time on the road, injuries can still occur. For instance, if a salesperson slips on an icy driveway while visiting a client’s office or gets into a car accident while traveling to a sales meeting, those injuries may be compensable under workers’ comp, depending on the state’s laws and the circumstances of the incident.


Having a valid workers’ compensation policy ensures that such injuries are covered, and the employee receives appropriate medical care and wage replacement while they recover. For the employer, this means protection from lawsuits and potential financial ruin. Without a policy, the business could be held personally liable for the worker’s medical costs, legal fees, and lost wages, leading to significant financial and reputational damage.


Understanding the Risks That 8742 Salespersons Face


Though 8742 is considered a low-hazard classification, it’s not risk-free. The primary danger lies in vehicular accidents, as most outside salespeople use their cars daily for work-related travel. Even a minor fender bender can result in soft tissue injuries or whiplash that may prevent the employee from working for weeks or months. Beyond driving,

salespeople may also walk through unfamiliar construction sites, manufacturing facilities, or retail environments. Uneven flooring, poor lighting, or slick surfaces can easily result in trips or falls. Additionally, carrying sample cases, promotional materials, or even laptops can result in repetitive strain or lifting-related injuries.


How Premiums Are Determined for Class Code 8742


Just like any other workers' compensation classification, the insurance premiums for 8742 are calculated using the standard formula:


Premium = (Payroll ÷ 100) × Classification Rate × Experience Modifier (EMR)


Since 8742 is a low-risk classification, the base classification rate per $100 of payroll is usually much lower than for risk-heavy classifications. While the rates vary by state and insurance carrier, it is common to see base rates around $0.30 to $0.50 per $100 of payroll. However, this can still add up for companies with a large outside sales team. The experience modifier is another crucial factor. If a business has a history of claims, even in a low-risk classification like 8742, their EMR could increase, driving premiums higher. Conversely, businesses with a clean claims history may receive a credit, reducing the overall cost.


Multi-State Considerations for 8742 Coverage


One of the complexities that many employers overlook is the impact of multi-state operations on workers’ comp coverage. A company headquartered in Florida with outside salespeople working in California, New York, and Texas must ensure that their workers' compensation policy includes those jurisdictions. Each state has its own regulations, filing requirements, and penalties for non-compliance. For example, California has some of the strictest enforcement, with penalties reaching into the tens of thousands for lack of coverage. Meanwhile, Texas allows companies to opt out of the system, though doing so leaves them vulnerable to direct lawsuits. Therefore, companies must partner with experienced insurance brokers who understand multi-jurisdictional compliance for mobile or remote workforces.


Common Injury Scenarios Specific to Outside Sales Roles


Outside salespeople often perform their duties in environments beyond their control. A common example includes slipping on icy pavement while walking into a client’s building. If the fall results in a sprained ankle or fractured wrist, the salesperson may be out of commission for weeks. Another scenario is a car accident while driving to an appointment.

Even if the accident was not the salesperson's fault, workers’ comp can help cover medical bills, lost wages, and rehabilitation costs. Even minor injuries, like carpal tunnel from repetitive laptop use or shoulder strain from carrying heavy sales kits, can evolve into long-term issues if untreated. These cases often become more expensive over time and lead to extended absences from work, underlining the need for proper insurance coverage.


The Importance of Accurate Classification and Policy Setup


Misclassification is one of the leading causes of insurance audits, fines, and denied claims. Some employers may mistakenly categorize outside salespeople under a clerical code, like 8810, assuming that low-risk equals interchangeable. However, the duties of a 8742 salesperson and an 8810 clerical worker differ significantly. A clerical employee spends most of their time in a controlled office setting, while an outside salesperson regularly travels and visits external environments. If a claim is filed and the insurance carrier finds the worker was misclassified, the insurer can deny the claim, and the employer may be subject to penalties, including back premiums and audit adjustments.

Ensuring correct classification from the beginning prevents future disputes and keeps the business compliant.


Why Ghost Policies Are Not the Solution for Small Sales Teams


In an effort to cut costs, some small business owners consider purchasing what’s known as a “ghost policy.” These are minimal workers’ compensation policies often used by sole proprietors or businesses without actual employees, primarily to show proof of insurance. However, ghost policies exclude the business owner and provide no actual coverage. While it might fulfill a contractual obligation, such as working with a large vendor or securing a license, it offers no protection if an employee—or even the owner—is injured. For a business with 8742 salespeople on staff, this kind of policy is not only inadequate but can be legally risky. If a salesperson gets injured and files a claim, the lack of real coverage can expose the company to lawsuits, regulatory fines, and criminal charges in states with strict enforcement.


Return-to-Work and Modified Duty Programs for Sales Staff


A common misconception is that workers’ compensation only kicks in for serious, long-term injuries. But it also plays a pivotal role in getting employees back to work after even minor incidents. Implementing a Return-to-Work (RTW) program for injured salespeople allows them to transition back into the workforce with modified responsibilities. For instance, a salesperson recovering from a knee injury may not be able to drive or walk for extended periods but could handle inside sales or CRM system updates remotely. These transitional duties help reduce claim costs, maintain employee engagement, and speed up the recovery process. It also benefits the employer by minimizing the overall impact on productivity and avoiding prolonged disability costs.


State-Specific Nuances That Affect 8742 Coverage


Each state imposes unique rules on workers’ compensation coverage, claims, and enforcement. In California, the state operates under a no-fault system, meaning employees receive benefits regardless of who caused the injury. This is advantageous but comes with high compliance expectations and audit frequency. New York requires prompt claim reporting and comprehensive documentation. Delays in filing can lead to claim denials and penalties. In contrast, Florida mandates that businesses with four or more employees, regardless of role, carry coverage. In all cases, businesses need to remain vigilant about local requirements, renewals, and classification audits. Falling out of compliance—even briefly—can result in backdated penalties and suspended business operations.


Risk Management and Loss Prevention for Mobile Workforces


Even though 8742 roles don’t carry the same risk profile as warehouse or construction workers, businesses can still implement effective risk management strategies to reduce the likelihood of claims. Providing safe driving training, reimbursing for ergonomic equipment (like laptop stands or lumbar-support seats), and offering stipends for secure footwear or winter tires are small investments that pay off in reduced injuries and claims. Encouraging salespeople to avoid rushing between appointments, use safe parking areas, and report any hazardous environments can also mitigate exposure. Frequent check-ins and open communication channels help identify potential issues early before they become claims.


The Role of Carriers and Brokers in Providing Proper Coverage


Choosing the right insurance carrier and broker makes a considerable difference in how a business navigates its workers’ compensation responsibilities. Carriers that specialize in small businesses or remote workforces often offer better pricing structures for 8742 roles. Some even provide telemedicine access, claims advocacy, and digital tools that streamline reporting and documentation. Brokers play an equally important role in ensuring accurate classification, securing multi-state compliance, and advising on EMR improvement strategies. They also help employers evaluate alternative options, such as pay-as-you-go premium plans, which can reduce the financial burden of up-front annual costs and improve cash flow.

What Does Class Code 8742 Represent?


Class code 8742 refers specifically to “outside salespersons”—those who primarily work away from the employer's business premises. These professionals spend their work hours visiting clients, attending meetings, conducting field sales calls, or managing customer relationships off-site. Unlike inside sales representatives who are stationed at desks or within retail locations, outside salespersons are mobile. This mobility, while essential for their roles, introduces a different set of risks compared to a conventional office job.


Workers in this classification are not typically engaged in physical labor, but they frequently drive long distances, carry product samples, attend trade shows, and interact in varied environments. The unpredictability of travel, unfamiliar locations, and regular movement between clients creates exposure to auto accidents, slip-and-fall incidents, and repetitive stress injuries—all of which fall under the purview of workers compensation if sustained in the course of employment.


Why Workers Compensation Is Necessary for 8742 Outside Salespersons


One common misconception is that outside salespeople don’t require workers compensation insurance because they aren’t involved in labor-intensive tasks. While it’s true that their roles are generally low-risk in comparison to jobs in construction or manufacturing, the risks they face are still very real.


The most prevalent risk stems from travel. Whether driving their own car or a company vehicle, outside salespersons spend significant time on the road. Auto accidents are one of the leading causes of workplace injuries for mobile employees. If a salesperson is injured in a car accident while on a work assignment, workers compensation coverage ensures their medical expenses and lost wages are handled without personal financial ruin.


Other risks include injuries during visits to client premises—where the conditions are beyond the employer’s control. A slip on a wet floor, tripping over loose carpeting, or even being involved in an incident at a customer’s warehouse can lead to unexpected injuries. Without proper workers compensation insurance, the employer may face liability claims, and the employee may struggle to cover medical costs or income loss during recovery.


State Laws and Legal Requirements for Code 8742


Most U.S. states mandate workers compensation insurance for any business with employees, regardless of the industry. While there are nuances in each state’s legislation, few make exceptions based solely on job classification. Therefore, even sales teams need coverage.


In states like California, Florida, and New York, failing to provide coverage for outside sales staff can result in severe penalties, including fines, stop-work orders, or even criminal charges in extreme cases. Regulatory agencies regularly conduct audits, and businesses that incorrectly classify or exclude 8742 employees may be subject to backdated premiums and legal repercussions.


Employers should not assume that just because a worker is salaried, remote, or travels independently that they are exempt from coverage. In most jurisdictions, outside salespeople are still considered employees in the legal sense, meaning they must be protected under workers compensation policies.


What Does a Workers Compensation Policy Cover for 8742 Salespersons?


A properly structured workers compensation policy offers several vital protections. First, it covers medical expenses arising from work-related injuries. This includes hospital stays, surgical procedures, physical therapy, and ongoing rehabilitation.


Second, the policy provides wage replacement benefits while the employee is recovering. This is usually a percentage of the employee’s average wage, intended to help them stay financially afloat during periods of disability.

Third, workers compensation includes permanent disability benefits in cases where the employee suffers lasting damage that impairs their ability to work. In extreme cases involving fatalities, death benefits are paid to surviving dependents.


Moreover, the policy typically includes liability protection for the employer. If an injured employee attempts to sue the company over an injury, the workers compensation system generally acts as the exclusive remedy, shielding the employer from further civil litigation.


Premium Calculation for Class Code 8742 Workers Compensation


Calculating the premium for a class 8742 workers compensation policy involves several factors. The base formula is consistent across industries: total payroll divided by $100, then multiplied by the base rate for the classification set by the state’s rating bureau or the National Council on Compensation Insurance (NCCI).


For example, let’s say a business has three outside sales representatives with a combined annual payroll of $210,000. If the state-assigned base rate for class code 8742 is $0.75 per $100 in payroll, the preliminary premium would be $1,575.

However, the actual cost is rarely that simple. The final premium is adjusted by various factors, including the Experience Modification Rate (EMR). This factor compares a business’s historical claims record to the industry average. A company with fewer claims than average could receive a credit, while a history of frequent or severe claims results in a debit or surcharge.


Additional modifiers include state assessments, safety program credits, drug-free workplace discounts, and more. Insurers may also conduct audits to verify payroll figures and employee classifications. Misclassifying an employee or underreporting payroll can trigger fines and higher premiums after audit adjustments.


The Impact of Misclassification


Proper classification is critical when dealing with workers compensation insurance. Misclassifying an outside salesperson as an office clerk (8810) to reduce premiums is a common but dangerous mistake. While the 8810 class has one of the lowest base rates, it does not account for the risks associated with travel or offsite work.


If an injury occurs and the insurer discovers the misclassification, they can deny the claim, leaving the employer solely responsible. Worse, if the state investigates and finds deliberate misclassification, the business may face penalties, interest charges, and legal scrutiny.


To avoid this, employers must accurately assign the 8742 class code to all relevant employees, clearly documenting their job duties and confirming they meet the criteria for outside sales. An audit trail demonstrating compliance can protect the business in case of future disputes.


Owner Inclusion in Class 8742 Policies


For business owners who also serve in a sales capacity, there is an important decision to make: should the owner be included in the workers compensation policy? Most states allow owners to exempt themselves, especially if they are the sole proprietor or a member of an LLC. However, inclusion can be a wise move for those actively engaged in field sales.

Including the owner ensures they receive the same wage replacement and medical benefits if injured while working. This is particularly relevant if the owner frequently travels, attends client meetings, or engages in high-value sales calls that involve extended mobility.


Owner inclusion is priced differently depending on the state. Insurers typically apply a minimum and maximum payroll assumption, often ranging from $45,000 to $100,000, regardless of the actual income. While this increases the premium, the protection it provides—especially for small business owners who can’t afford extended downtime—can be invaluable.


Common Claims Filed by 8742 Salespersons


Despite the perception of low risk, injuries do happen. The most common claims for class code 8742 involve vehicle-related accidents, particularly during client visits or while transporting sales materials. Even minor collisions can result in whiplash, soft tissue damage, or concussions, leading to medical claims and time off work.


Other frequent claims involve slips and falls at client locations or public spaces, such as hotels, event venues, or retail stores. Outside sales professionals often operate in unfamiliar environments, and uneven sidewalks, icy entryways, or poor lighting can result in unexpected injuries.


Repetitive stress injuries, such as carpal tunnel syndrome from excessive laptop use or chronic shoulder pain from carrying samples, also surface in claims reports. Although these develop over time, they are still compensable if directly related to work activity.


Lastly, stress-related injuries are gaining recognition. The pressures of meeting sales quotas, frequent travel, and work-life imbalance can lead to burnout or psychological issues. While these claims are more complex to prove, certain states do allow compensation for mental health conditions caused by work.


Claims Process and Employer Responsibilities


When an outside salesperson is injured on the job, the employer must promptly initiate the workers compensation claim. This involves reporting the incident to the insurance carrier, completing relevant forms, and cooperating with any investigation.


Failure to report claims promptly can result in delayed benefits or legal complications. Employers must also provide the injured employee with access to approved medical providers and support their recovery process.


Employers have a legal obligation to maintain accurate records, ensure proper classifications, and educate their staff about workplace injury procedures. Offering ergonomic tools, enforcing safe driving policies, and encouraging self-care among sales teams can further reduce the risk of injuries.

Injury Risks Associated with Outside Sales Roles


While outside sales positions are not typically associated with hazardous environments, they are not immune to workplace injuries. The very nature of constant travel and irregular workspaces creates its own spectrum of risks. Automobile accidents top the list of injury causes for outside salespeople. Whether they drive a company vehicle or their own, the risk of being involved in a car crash during working hours is ever-present.


Other injury scenarios include slip-and-fall incidents when visiting unfamiliar client locations, repetitive strain injuries from carrying promotional materials, and even environmental exposures when working outdoors in varying weather conditions. The unpredictable nature of their work environment means that standard office safety protocols don't apply, and this increases the likelihood of an incident that could lead to a claim.


In many states, injuries sustained while an employee is “in the course and scope” of their employment are fully compensable, even if they occur outside traditional workspaces. This means that if an outside salesperson is injured walking up icy steps to a client’s office or is in a car accident while heading to a sales meeting, the employer is likely liable under workers’ compensation laws.


How Workers’ Compensation Functions for 8742 Employees


Workers’ compensation for 8742 employees works in the same fundamental way as for other classifications: it provides coverage for medical bills, lost wages, rehabilitation, and in tragic cases, death benefits. But the claims process for these roles can be more nuanced due to the mobile nature of their work.


One challenge insurers and employers face is validating whether the employee was indeed performing work duties at the time of injury. Unlike factory workers or office employees with fixed hours and locations, outside salespeople often work with minimal supervision, irregular schedules, and a high degree of autonomy. This complicates the documentation of claims and can lead to disputes if evidence isn’t clearly maintained.


Employers should ensure that 8742 employees maintain detailed schedules, document meetings and routes, and stay in regular contact with supervisors. GPS tracking, expense reporting, and calendar management software are not just productivity tools—they’re crucial in the event of a claim.


How Premiums Are Calculated for 8742 Workers’ Comp


The premium for workers’ compensation insurance is determined by multiplying the employer’s total payroll for a specific job classification by the rate assigned to that classification code in the employer’s state. For class 8742, the rates are often significantly lower than those of manual labor classifications due to the generally lower injury rates.


For example, if a business pays an annual salary of $500,000 to its team of outside sales reps and the state-assigned rate for class 8742 is $0.55 per $100 of payroll, the base premium would be $2,750. Compared to classifications like construction or manufacturing—where rates can reach $10 to $20 per $100—the difference is substantial.


However, this doesn’t mean that 8742 coverage is immune to increases. Insurers take into account the Experience Modification Rate (EMR), which adjusts premiums based on the employer’s historical claims data. An EMR of 1.0 is the baseline. If the company has a clean record, the EMR may drop below 1.0, reducing premiums. Frequent or severe claims can push it above 1.0, increasing costs. A single car accident with serious injury could significantly impact the EMR for multiple years.


Common Mistakes Employers Make with 8742 Employees


One of the most prevalent errors among business owners is misclassifying their employees. Sometimes, businesses will assign a lower-risk classification like 8810 (clerical) to outside sales personnel to reduce premium costs. However, if an injury occurs, and it’s determined that the individual was misclassified, the insurer can deny the claim. Worse yet, the state could levy penalties, require retroactive payments, or cancel the policy.


Another common misstep is assuming that contractors or 1099 sales reps don’t need to be covered. While it’s true that independent contractors are not traditional employees, many states have strict rules defining employment status. If a 1099 rep operates under the company’s control, uses company resources, or is integral to the business operation, they may be considered de facto employees. In such cases, failing to include them in the workers’ compensation policy could lead to exposure.


Some employers also purchase “ghost policies”—minimal coverage policies used primarily to generate a Certificate of Insurance (COI) for compliance. These do not include actual coverage for any employees. While this might pass muster for small consulting businesses with zero staff, using a ghost policy while employing actual outside salespeople is considered fraud in many jurisdictions.


The Legal Obligations Around 8742 Workers’ Comp


Virtually every state mandates that employers carry workers’ compensation insurance if they have even one employee. California, for example, has no exemption for small employers or for employees who work remotely or in the field. The law is clear: if someone performs services for pay, they must be covered.


Failing to maintain coverage can result in serious consequences. In California, for instance, the Division of Labor Standards Enforcement (DLSE) can impose fines up to $100,000, along with stop-work orders and even criminal charges. Other states like New York, Illinois, and Pennsylvania have similar enforcement regimes.


Moreover, when an employer does not have coverage, injured employees can sue in civil court—where damages are often significantly higher than those awarded through workers’ comp. The lack of insurance also prevents employers from using certain legal defenses, like claiming contributory negligence.


Managing Risk for Outside Sales Personnel


Though outside sales positions are low-risk in theory, managing risk effectively requires planning and oversight. Employers should implement formal driving policies if their team is on the road. This includes requirements for safe driving records, seatbelt use, and mobile phone restrictions. Regular training on defensive driving and vehicle maintenance can also help reduce the likelihood of accidents.


If company vehicles are used, routine inspections and documentation should be part of the company’s risk management protocol. If employees use their personal vehicles, the business should verify that they carry adequate personal auto insurance and that there’s a non-owned auto liability policy in place.


Additionally, sales employees should be trained in how to safely interact with unfamiliar environments. Basic awareness of potential hazards, such as unsafe stairwells, unlit entrances, or aggressive animals, can help reduce incidents.


Finally, encourage employees to report even minor injuries or incidents. Prompt reporting not only aids treatment but also helps the employer manage the claim effectively and avoid unnecessary complications.

  • What insurance adjusters won't tell you?

    During a workers’ compensation audit for an office, the insurance company reviews the business’s records to ensure that the correct premiums were paid for the policy period. The audit typically happens at the end of the policy term and focuses heavily on payroll documentation and job classifications.


    The auditor will request payroll records such as tax reports, general ledgers, and employee rosters to verify the total amount of wages paid. They compare this data against the amounts originally estimated when the policy was written. This helps determine whether the company underpaid or overpaid premiums based on actual payroll figures.


    A key part of the audit involves reviewing job descriptions to make sure employees are properly classified. Office or clerical workers are usually assigned lower-risk (and therefore lower-cost) classification codes. The auditor checks that only employees who truly perform clerical or administrative work are included under these codes. If they find that some workers also perform duties outside the office—such as making deliveries, supervising fieldwork, or handling manual tasks—those wages may be reclassified under higher-risk categories.

  • What is the correct Workers' Comp Class Code for buffing and polishing metal?

    The correct workers’ compensation class code for “buffing and polishing metal” under the National Council on Compensation Insurance (NCCI) classification system is 3372 – Metal Finishing (which covers electro-plating, polishing, buffing, etc.). 


    If you are in California, note that under the Workers’ Compensation Insurance Rating Bureau of California it’s listed as 3372(3) – Buffing/Polishing of Meta

  • How high is the premium for a metal buffing/finishing business?

    When it comes to figuring out the “premium” for a metal-buffing/finishing business (that is, how much above a baseline value buyers are willing to pay because of special advantages, certifications or growth prospects), there’s no one standard figure — it depends a lot on the business’s size, margin, market niche and risk profile. However, we can offer some realistic guidance for the kind of multiples such a business might command, and what drives a premium.


    Firstly: based on a recent review of metal product / metal manufacturing businesses (which includes finishing operations) in the U.S., median multiples for sale price vs. owner’s discretionary earnings (SDE) are around 2.9-3.1× SDE for sold businesses in good condition. 

    BizBuySell

     The revenue multiples (sale price divided by annual revenue) are around 0.74× revenue on average. 

    BizBuySell


    Now for a finishing / buffing business, some factors might raise the multiple above average (i.e., a premium) and some might cause discounting. Here’s how “premium” works in practice:

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