Why we need details on your business operations.
NAICS – Why Classification Matters in Commercial Insurance
The Real Problem in the Insurance Industry
The horror stories you hear about obtaining commercial insurance often come from a deep-rooted issue in our industry—sales over education.
Too often, agents rush through the complicated process of commercial insurance just to meet a quota. But the truth is, this process should be about communication, understanding, and asking the right questions to properly classify your business.
Why Classification is Critical
Your business classification directly affects:
- What you pay for coverage
- What type of coverage you qualify for
Accurate classification helps you:
- Understand which services are most profitable based on risk
- Ensure coverage fits your operations
- Avoid costly gaps in protection
Unfortunately, incorrect classifications happen far too often:
- A restaurant classified as a bank
- A multi-million-dollar business paying $2k for a policy that’s basically worthless
- A tree removal service classified as a landscaper
These real-life examples could mean financial disaster if a claim is denied. If you’re paying for a policy, you need it to respond when you need it most.
What is NAICS?
According to Census.gov,
“The North American Industry Classification System (NAICS) is the standard used by Federal statistical agencies in classifying business establishments for the purpose of collecting, analyzing, and publishing statistical data related to the U.S. business economy.”
Our Process for Getting It Right
We take classification seriously. Our approach includes:
- Talking directly with the business owner
- Walking through a typical workday
- On-site visits (when possible)
- Detailed interviews to fully understand your operations
Our job is to advocate for you and present your business accurately to underwriters—just like we sell you a policy, we have to “sell” your business to them.
Keeping Your Classification Accurate
Classification isn’t a “set it and forget it” process.
Like a flower, your business grows and changes, and your coverage should evolve too. At every renewal, we ask:
- Are you offering new services?
- What’s your projected gross sales?
- Have you made new hires?
If your current agent isn’t asking these questions at least once a year, they could be putting your business at risk.
Bottom line: The right NAICS classification is more than a number—it’s the foundation for your protection.