Learn how insurance companies use SIC codes to classify your industry and calculate your premiums. Commercial insurers use SIC codes to determine if your business is in a high risk industry classification and to determine your premium.
How Insurance Companies Use SIC Codes
What’s the best way to describe your company’s business operations? What type of industry are you involved in? What kinds products or services do you sell? These are some of the questions asked by commercial insurance companies when trying to classify your business by Standard Industrial Classification (SIC) code.
An SIC code is a four digit numerical code assigned by the U.S. government to businesses in order to identify the primary activity of the business. The first two digits of the code identify the major industry group, the third digit identifies the industry group and the fourth digit identifies the industry.
But how does your business classification affect your premiums and insurance cost? Let’s look at some of the the issues around how insurance companies use SIC codes.
Business SIC Codes
How insurance companies use SIC codes. Although the NAICS classification system was adopted in 1997, insurers selling commercial insurance use SIC codes in many ways – to analyze and classify the businesses they insure, or choose not insure. Industry codes help insurers with several analytical processes involving marketing, underwriting, exclusions, loss control, forms, pricing and other operations.
Some small business sic code classifications can result in you paying higher premiums for your business insurance. It is important that your business is classified properly.
SIC Division Structure
Following is a list of all the Major Groups of SIC codes. Click on the linked groups to drill down to the four digit codes:
A. Division A: Agriculture, Forestry, And Fishing
This division includes establishments primarily engaged in agricultural production, forestry, commercial fishing, hunting and trapping, and related services.
- Major Group 01: Agricultural Production Crops
- Major Group 02: Agriculture Production Livestock And Animal Specialties
- Major Group 07: Agricultural Services
- Major Group 08: Forestry
- Major Group 09: Fishing, Hunting, and Trapping
B. Division B: Mining
This division includes all establishments primarily engaged in mining.
- Major Group 10: Metal Mining
- Major Group 12: Coal Mining
- Major Group 13: Oil And Gas Extraction
- Major Group 14: Mining And Quarrying Of Nonmetallic Minerals, Except Fuels
C. Division C: Construction
This division includes establishments primarily engaged in construction. The term construction includes new work, additions, alterations, reconstruction, installations, and repairs.
- Major Group 15: Building Construction General Contractors And Operative Builders
- Major Group 16: Heavy Construction Other Than Building Construction Contractors
- Major Group 17: Construction Special Trade Contractors
D. Division D: Manufacturing
The manufacturing division includes establishments engaged in the mechanical or chemical transformation of materials or substances into new products.
- Major Group 20: Food And Kindred Products
- Major Group 21: Tobacco Products
- Major Group 22: Textile Mill Products
- Major Group 23: Apparel And Other Finished Products Made From Fabrics And Similar Materials
- Major Group 24: Lumber And Wood Products, Except Furniture
- Major Group 25: Furniture And Fixtures
- Major Group 26: Paper And Allied Products
- Major Group 27: Printing, Publishing, And Allied Industries
- Major Group 28: Chemicals And Allied Products
- Major Group 29: Petroleum Refining And Related Industries
- Major Group 30: Rubber And Miscellaneous Plastics Products
- Major Group 31: Leather And Leather Products
- Major Group 32: Stone, Clay, Glass, And Concrete Products
- Major Group 33: Primary Metal Industries
- Major Group 34: Fabricated Metal Products, Except Machinery And Transportation Equipment
- Major Group 35: Industrial And Commercial Machinery And Computer Equipment
- Major Group 36: Electronic And Other Electrical Equipment And Components, Except Computer Equipment
- Major Group 37: Transportation Equipment
- Major Group 38: Measuring, Analyzing, And Controlling Instruments; Photographic, Medical And Optical Goods; Watches And Clocks
- Major Group 39: Miscellaneous Manufacturing Industries
This division includes establishments providing, to the general public or to other business enterprises, passenger and freight transportation, communications services, or electricity, gas, steam, water or sanitary services, and all establishments of the United States Postal Service.
- Major Group 40: Railroad Transportation
- Major Group 41: Local And Suburban Transit And Interurban Highway Passenger Transportation
- Major Group 42: Motor Freight Transportation And Warehousing
- Major Group 43: United States Postal Service
- Major Group 44: Water Transportation
- Major Group 45: Transportation By Air
- Major Group 46: Pipelines, Except Natural Gas
- Major Group 47: Transportation Services
- Major Group 48: Communications
- Major Group 49: Electric, Gas, And Sanitary Services
F. Division F: Wholesale Trade
This division includes establishments or places of business primarily engaged in selling merchandise to retailers; to industrial, commercial, institutional, farm, construction contractors, or professional business users; or to other wholesalers; or acting as agents or brokers in buying merchandise for or selling merchandise to such persons or companies.
- Major Group 50: Wholesale Trade-Durable Goods
- Major Group 51: Wholesale Trade-Non-Durable Goods
G. Division G: Retail Trade
This division includes establishments engaged in selling merchandise for personal or household consumption and rendering services incidental to the sale of the goods.
- Major Group 52: Building Materials, Hardware, Garden Supply, And Mobile Home Dealers
- Major Group 53: General Merchandise Stores
- Major Group 54: Food Stores
- Major Group 55: Automotive Dealers And Gasoline Service Stations
- Major Group 56: Apparel And Accessory Stores
- Major Group 57: Home Furniture, Furnishings, And Equipment Stores
- Major Group 58: Eating And Drinking Places
- Major Group 59: Miscellaneous Retail
H. Division H: Finance, Insurance, And Real Estate
This division includes establishments operating primarily in the fields of finance, insurance, and real estate.
- Major Group 60: Depository Institutions
- Major Group 61: Non-depository Credit Institutions
- Major Group 62: Security And Commodity Brokers, Dealers, Exchanges, And Services
- Major Group 63: Insurance Carriers
- Major Group 64: Insurance Agents, Brokers, And Service
- Major Group 65: Real Estate
- Major Group 67: Holding And Other Investment Offices
I. Division I: Services
This division includes establishments primarily engaged in providing a wide variety of services for individuals, business and government establishments, and other organizations.
- Major Group 70: Hotels, Rooming Houses, Camps, And Other Lodging Places
- Major Group 72: Personal Services
- Major Group 73: Business Services
- Major Group 75: Automotive Repair, Services, And Parking
- Major Group 76: Miscellaneous Repair Services
- Major Group 78: Motion Pictures
- Major Group 79: Amusement And Recreation Services
- Major Group 80: Health Services
- Major Group 81: Legal Services
- Major Group 82: Educational Services
- Major Group 83: Social Services
- Major Group 84: Museums, Art Galleries, And Botanical And Zoological Gardens
- Major Group 86: Membership Organizations
- Major Group 87: Engineering, Accounting, Research, Management, And Related Services
- Major Group 88: Private Households
- Major Group 89: Miscellaneous Services
J. Division J: Public Administration
This division includes the executive, legislative, judicial, administrative and regulatory activities of Federal, State, local, and international governments.
- Major Group 91: Executive, Legislative, And General Government, Except Finance
- Major Group 92: Justice, Public Order, And Safety
- Major Group 93: Public Finance, Taxation, And Monetary Policy
- Major Group 94: Administration Of Human Resource Programs
- Major Group 95: Administration Of Environmental Quality And Housing Programs
- Major Group 96: Administration Of Economic Programs
- Major Group 97: National Security And International Affairs
- Major Group 99: Nonclassifiable Establishments
How Insurance Companies Use SIC Codes – The Bottom Line
We hope this article on how insurance companies use SIC codes has been informative. Your classification determines how much you pay for your business insurance and much more.