Author, Drew Garcia, Vice President, Landscape Group, Rancho Mesa Insurance Services, Inc.

The year 2025 will mark my 10th year working with landscape, lawn care and tree care professionals across the country. This long-term approach allows our team the time to learn and grow with the industry. Being able to understand landscape operations and accurately relay this information to the insurance carriers is a critical component to the overall insurance program we put together for our clients.

Insurance carriers almost always audit policies at the completion of the term to reconcile estimated payroll versus earned payroll, and return or collect any additional premium. For workers’ compensation purposes, in states that are under the National Council on Compensation Insurance (NCCI) rating bureau (in which there are currently 35), the two major class codes used by landscape professionals are 0042 Landscape Gardening and 9102 Lawn Care Services. Each code applies to specific job duties; they have different rates per $100 of payroll; and, when the employer can clearly allocate payroll, both codes can be used. Without clear payroll records, however, the insurance carrier can consider summing all payroll into the higher tier.

The 0042 Landscape Gardening classification is considered a construction code and should be used for the new installation of landscapes. However, 9102 Lawn Care Services is not a construction code and should be used for the maintaining and servicing of existing landscapes. The difference in rate, depending on the state(s) in which you operate, can nearly be double for 0042 versus 9102. It is critical to clearly understand when to use each class code to avoid any misclassification that could disrupt cash flow during the policy or surprise you at audit with an additional owed premium.

The nuance of class codes for workers’ compensation does not stop here. Landscape professionals within NCCI states have nearly five or six other codes to consider for their operations, all with specific duties and varying rate. In addition to workers’ compensation codes, general liability policies use a similar system to differentiate services in order to collect adequate premium.

So, in order to avoid reclassification of payroll at the end of a workers’ compensation policy term, keep accurate records and talk to your insurance advisor.

For a more detailed discussion about your operations and the corresponding class code assignments, please reach out to me at (619) 937-0200 or drewgarcia@ranchomesa.com.