General liability class codes

General liability (GL) class codes are numbers that categorize businesses by the type of work they do and the level of risk involved. Insurance carriers use these codes to estimate potential claims and calculate premiums for general liability insurance.

Most insurers rely on standardized lists developed by organizations like the Insurance Services Office (ISO) or government classifications such as North American Industry Classification System (NAICS) or Standard Industrial Classifications (SIC) codes. These lists group businesses with similar activities and risk levels.

Because there's no single national standard for GL class codes, each insurer—and sometimes each underwriter—may interpret codes slightly differently. That means your code, and potentially your premium, could change if you switch carriers.

Class codes allow insurers to compare your business to others, analyze historical claims, and determine how much coverage should cost. They also help ensure policies are priced fairly based on risk.

There are a few key elements about class codes a small business owners should know, including:

Class code is just one factor in your premium. Other factors, like gross sales, payroll, location, claims history, and business size, also affect rates.

Changes to your business matter. Adding new services, products, or types of work can change your risk profile and require a new class code.

Ask your agent for clarity. When applying or renewing coverage, be sure to ask: “What class code are you using for my business?” Then keep this documentation with your policy for future reference.

Be aware of mixed operations. Many small business owners wear multiple hats, such as a photographer who also shoots videos or a cleaner who does minor repairs. You may need multiple class codes to ensure all activities are covered.

Codes vary by insurer, so it best to always verify with your agent before finalizing a policy.

Insurers use general liability class codes to exclude coverage for certain types of claims.

For example, let’s say you bought general liability insurance for your real estate agency. Your class code is “47050 Real Estate Agents.” However, you decide to take on a renovation construction project for one of your clients—work you used to do before you became a real estate agent.

If you or one of your workers injures a passer-by at your job site, your general liability insurer might not cover your claim because the loss resulted from you working outside the class code assigned to your policy.

General liability class codes and workers’ compensation class codes are similar in that they both classify businesses by risk to help insurers charge an accurate premium.

However, they can only be used for their specific insurance product. For example, an insurer can’t use the NCCI workers’ compensation codes to generate premiums for general liability insurance or general liability codes to price workers’ compensation insurance.

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