Landscaping Workers' Comp Explained: NCCI 0042 vs 0106, Audits, and Your Experience Mod

Most landscaping owners know their workers' comp premium is tied to payroll, but fewer understand the two mechanisms that determine the final bill: the annual payroll audit that runs after the policy year closes, and the experience modification rate that compounds across three years of claim history. Class codes 0042 and 0106 set the base rate, but the audit and the mod are where premiums either stay manageable or become a problem. This guide explains both, and the practical steps that keep costs in check.

Class Codes 0042 and 0106: The Base Rate Foundation

Workers' comp premium starts with the NCCI classification code assigned to each employee's work. For landscaping, two codes do most of the work.

• Code 0042 (Landscape Gardening and Drivers). Ground-based lawn care, planting, irrigation, and maintenance. 2025 national average rate: $4.39 per $100 of payroll.
• Code 0106 (Tree Pruning, Spraying, Repairing and Drivers). Tree work at elevation: climbing, aerial lift operation, and removal. 2025 national average rate: $7.63 per $100 of payroll, roughly 74% higher than 0042.

For a full breakdown of landscaping insurance costs across all five core coverages, see our complete landscaping business insurance guide. California uses the WCIRB rather than NCCI, with equivalent codes at different rates.

How the Annual Payroll Audit Works

Workers' comp is written on estimated payroll at the start of the policy year. At the end of the year, the carrier runs a payroll audit to reconcile what was estimated against what was actually paid. If actual payroll is higher than estimated, you owe the difference. If lower, you receive a credit. The class code assignment at audit is where most unexpected bills originate.

1. Mixed payroll defaults to the higher code. If a crew member performs both ground maintenance and occasional tree climbing and their hours are not separated in your records, the auditor has discretion to assign all of that payroll to Code 0106. On $45,000 of annual wages, the comp cost difference between 0042 and 0106 is roughly $1,460.
2. Uninsured subcontractors become employees. If you used subcontractors who cannot produce a valid certificate of insurance, the auditor can reclassify their labor as employee payroll. This adds premium retroactively and can generate a substantial audit bill.
3. Clerical payroll must be clearly separated. Office and administrative staff qualify for Code 8810, which carries a significantly lower rate. Clerical wages mixed into field payroll records are assigned field rates by default.

Preparation makes the difference. Before audit, gather your payroll records by employee and by job type, current certificates of insurance for every subcontractor used during the year, and a summary of total revenue by service category. Auditors work with what you give them. Organized records reduce discretionary reclassifications.

TruPoint's landscaping insurance program reviews payroll classification before binding rather than leaving it to the year-end audit.

Your Experience Modification Rate and What Moves It

The experience modification rate (mod) is a multiplier applied to your base premium after the class code rate is set. NCCI calculates it annually using three years of your loss data (excluding the most recent completed year) compared against expected losses for operations of your size and class code mix.

• Mod of 1.00. Industry average. Your premium equals the manual rate with no adjustment.
• Mod below 1.00. A 0.85 mod reduces base premium by 15%. Consistent safety documentation and low claim frequency typically produce a below-1.00 mod within two to three years.
• Mod above 1.25. Many carriers restrict or decline new accounts at this level. A 1.30 mod adds 30% to base premium on top of already-elevated tree work rates.

One point that consistently surprises owners: claim frequency carries more weight than severity in the mod formula. Three small claims in one year can damage a mod more than a single larger claim. This is why prompt reporting and return-to-work programs, both of which close claims faster, have a direct dollar return at renewal.

The Claim Types That Move Landscaping Mods Most

Landscaping and horticultural services workers experience injury rates above the national private-sector average. OSHA and CDC/NIOSH data point to four categories that account for the majority of claim activity.

• Struck-by incidents. Debris from mowers and trimmers is the leading cause of eye injuries. High-frequency and moderate-severity, these claims accumulate quickly in the mod formula.
• Overexertion and soft-tissue strain. Repetitive lifting and carrying in variable terrain generates a high volume of claims with long recovery timelines. These sit open for months, pulling at the mod across multiple calculation periods.
• Falls from elevation. The highest-severity claim type in the industry. A single fall claim can push a mod above 1.25 and affect carrier appetite for up to five years.
• Heat illness. Extended summer fieldwork in warm climates generates heat-related claims that are entirely preventable with documented protocols. Several states are moving toward enforceable heat illness prevention standards for outdoor workers.

How TruPoint Approaches Landscaping Workers' Comp

TruPoint writes workers' comp for landscaping, lawn care, tree service, and irrigation contractors with carriers experienced in the industry's class code structure. We review payroll classification and subcontractor certificate status before binding, not at audit, to prevent year-end surprises. Our team understands how the mod formula works and how to present prior loss runs in a way that gives carriers the context they need to price fairly. For related coverage detail, see our landscaping general liability guide.

If you want a second opinion on your current workers' comp program, your experience mod, or your audit results, visit our landscaping insurance page or contact our team directly.

Additional Resources

NCCI Workers' Compensation Classification System

WCIRB California Workers' Compensation Classification and Rating

OSHA Landscaping and Horticultural Services Safety

CDC/NIOSH Landscape Services Occupational Safety

Tree Care Industry Association ANSI Z133 Safety Standards

Disclaimer

The information contained in this article is provided for general informational purposes only and should not be construed as legal, tax, or insurance advice on any specific matter. Coverage availability, terms, and premium vary by carrier, state, and individual risk profile. TruPoint recommends consulting a licensed insurance professional before making coverage decisions.