Classifying Risk-Heating Equipment

270.6-36

CLASSIFYING RISK–HEATING EQUIPMENT

(April 2019)

INTRODUCTION

Boilers, furnaces, space heaters, coal and wood burning devices, and related heating equipment supply heat to the buildings in which we live and work. Manufacturers, distributors, dealers, and retailers are all part of the process of getting these essential heat generating units to us. This article provides guidance on how to classify the different businesses necessary to kept us warm.

 

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MANUFACTURERS

The first thought in classifying a heating device may be one of the Appliances and Accessories Manufacturing classifications. However, the notes that accompany these classifications state that heating equipment manufacturers must be classified and rated separately. As a result, the Appliances and Accessories Manufacturing classes are not classes to be used for any heating equipment sales.

The next step is to review the heating equipment classifications. There are four classifications that apply to heating equipment manufacturing. Each is based on the type of fuel used.

The notes that accompany each classification state that installation, service, or repair is to be classified and rated separately. In addition, codes 55011 and 55013 include combined heating and air conditioning equipment manufacturing. As a result, air-conditioning manufacturing is not classified and rated separately. The premium base for all codes is sales.

The differences in rates and the corresponding premiums charged based on the type of fuel used are significant. For this reason, the insured that is not a single source manufacturer should maintain separate sales records for each energy source type of equipment. Otherwise, premium audit rules require that the rates for the highest rated classification apply to all sales.

DISTRIBUTORS AND DEALERS–WITH AND WITHOUT INSTALLATION

There is one classification for distributors and dealers that sell this type of equipment but do not install, service, or repair it. Class Code 13930: Heating or Combined Heating and Air Conditioning Equipment–Dealers or Distributors Only applies to all equipment sold, regardless of the energy source. The premium base is sales.

There are two other classifications, each of which includes installation, service, and repair (in addition to sales) in a single class code. Their premium base is payroll because installation, service, and repair usually make up a significant part of these operations. The only difference between the two is that one includes liquefied petroleum gas (LPG) equipment sales or work and the other does not.

The notes that accompany both classifications state that they include duct and piping sales and installation as well as shop and display rooms.

Note: These two codes cannot be used in combination. Class code 95648 is used if the risk is involved with LPG fuel or units and class code 95647 is used only if it is not.

RETAIL SALES

These are businesses that sell portable heating units in addition to other household goods and appliances. ISO has four classifications, none of which include installation, service or repair. The premium basis for each is sales.

The notes that accompany these class codes do not exclude portable heating units or state that they must be classified and rated separately. As a result, their sales can be combined for rating with those of other goods held for sale.

SUMMARY

Staying warm in winter is essential but heating equipment installed incorrectly or used improperly can be deadly. Carbon monoxide detectors should also be installed and maintained in proper operating condition if the home or business has gas, fuel oil, or LPG gas furnaces or appliances. Electric space heaters must be grounded properly, outlets must not be overloaded, and children must be kept away from both. Batteries used in smoke alarms should be changed regularly or on a scheduled basis because accidents can and do occur.