RIA Pushes for New NAICS Code to Recognize Emergency Restoration Services

By Claim Clinic Press Staff

The Restoration Industry Association (RIA) has taken a significant step toward securing proper recognition for the restoration industry by formally requesting the creation of a dedicated North American Industry Classification System (NAICS) code—624231: Emergency Restoration Services. The request, submitted as part of the 2027 NAICS review, seeks to rectify the long-standing misclassification of restoration services under broader construction and remediation categories.

For years, restoration professionals have struggled with being lumped into classifications that do not accurately represent their specialized work. Emergency restoration is not merely construction or cleaning—it involves highly skilled mitigation services, including water extraction, microbial remediation, odor control, and structural stabilization, often performed under urgent and hazardous conditions. The current classification system creates confusion, delays service delivery, and complicates industry data collection.

According to the RIA, a dedicated NAICS code would provide multiple benefits, including:

• Better Industry Recognition: A unique classification would help distinguish restoration professionals from general contractors, ensuring their expertise is properly recognized by government agencies, insurers, and emergency response organizations.
• Improved Safety Standards: Restoration work carries specific risks, such as exposure to hazardous materials and unstable structures. A new NAICS code would facilitate targeted safety protocols and industry-specific training programs.
• Accurate Data Collection: Misclassification makes it difficult to track industry trends, revenue, and workforce statistics. A dedicated code would improve data collection, leading to better advocacy and policy support.
• Enhanced Access to Opportunities: Clear classification could streamline access to government contracts, funding, and industry-specific programs, benefiting both businesses and consumers.

The proposal is now under review by the Economic Classification Policy Committee (ECPC), which will evaluate public submissions and make recommendations to the Office of Management and Budget (OMB). A final decision is expected by March 2026, with updated NAICS codes set to be published in January 2027.

This effort was led by the RIA NAICS Code Task Force, a group that originated from the AGA Legislative Task Force. Their work underscores the growing recognition that restoration is a critical component of disaster recovery and property protection, not just an extension of construction or janitorial services.

The restoration industry will now await the government’s response, but one thing is clear: the push for a dedicated NAICS code is long overdue.

For more details, visit the Restoration Industry Association at www.restorationindustry.org.

Opinion: Why a Unique NAICS Code is Critical for the Future of Restoration

The restoration industry has been overlooked for too long. For decades, professionals who specialize in emergency restoration have been misclassified as mere contractors or cleaners—an outdated categorization that does a disservice to their expertise, business operations, and the communities they serve. The Restoration Industry Association’s push for a dedicated NAICS code is not just about bureaucratic housekeeping; it is about ensuring the industry gets the recognition, resources, and regulatory support it deserves.

Fair Workers’ Comp Premiums Through Accurate Risk Assessment

A dedicated NAICS code for emergency restoration would help insurers assess risk more accurately and set fairer workers’ compensation premiums. Today, many restoration contractors are lumped under general construction or remediation codes, which carry higher risk profiles than restoration work. This misclassification means restorers often pay inflated insurance rates as if they were doing riskier jobs. For example, a roofing contractor might pay around $12 per $100 of payroll in workers’ comp premiums, while a janitorial services firm pays about $2.50. If restoration companies are classified like heavy construction, they could be charged at the higher end of that spectrum even if their actual work isn’t as hazardous.

Establishing NAICS 624231 (Emergency Restoration Services) would carve out a distinct category so that insurers can evaluate restoration firms on their own merits, not as an offshoot of construction. In short, proper classification = fair premiums. Restoration businesses would no longer subsidize the insurance costs of riskier industries, and carriers could price policies based on real restoration risk data rather than broad assumptions. The result is likely lower base rates for workers’ comp, correcting the unfair overpricing restorers currently endure.

Industry-Specific Safety Standards = Fewer Accidents (and Claims)

Another advantage of a unique NAICS code is the ability to develop tailored safety regulations and training programs for the restoration field. Right now, safety guidelines are often generic or borrowed from related industries that don’t face the exact mix of hazards restoration professionals do (e.g. mold, contaminated water, structural instability). A dedicated classification would spotlight these unique risks and encourage regulators and industry groups to create targeted safety standards and certifications just for emergency restoration. Companies could train employees with scenarios specific to water extraction, microbial remediation, and disaster cleanup, rather than general construction safety alone. The payoff is a safer work environment and a drop in on-the-job injuries. Fewer workplace accidents directly translate to fewer workers’ comp insurance claims, which in turn helps drive down insurance premiums. (Insurance carriers reward lower claim frequency with lower rates over time.) In essence, better safety through specialization not only protects employees but also reduces one of the biggest cost drivers of insurance. By embracing restoration-specific safety practices under a new NAICS code, the industry can build a track record of lower injury rates, giving insurers the confidence to lower premiums for these businesses.

Better Data Collection Improves Premium Calculations

The creation of NAICS 624231 would enable more precise data collection on restoration industry operations, revenues, and—importantly—loss histories. Today’s statistics on workplace injuries and insurance claims for restorers are hard to isolate; they’re buried inside broader construction or cleaning industry data. This lack of clarity forces insurers to guess at the appropriate premium levels. With a clearly defined NAICS code, however, agencies and insurers could gather clean, specific data on the frequency and severity of restoration-related injuries and claims. Insurance rating organizations (like NCCI in the U.S.) rely on accurate loss data to set workers’ comp base rates for each type of work.

Better data = better underwriting. Over a few years, the industry would accumulate solid statistics showing exactly what risks restoration workers face, how often claims occur, and how costly those claims tend to be. If the data show, for instance, that emergency restoration has lower injury frequencies than general construction, insurers can adjust the class codes or rates to reflect that lower risk. Even if some risks are unique (mold-related illnesses, etc.), having refined actuarial data ensures premiums are based on actual experience rather than worst-case assumptions. In short, a dedicated NAICS code would give both the industry and insurers the hard numbers needed for fair, refined premium calculations, eliminating the “safety buffer” upcharges that misclassified businesses often endure.

Competitive Cost Relief for Restoration Businesses

Perhaps one of the most significant business impacts of securing a proper NAICS classification is the potential reduction in workers’ comp insurance costs – a major expense for any labor-intensive company. Lower insurance premiums would provide immediate financial relief and improve the viability of restoration firms, especially smaller companies operating on tight margins. It’s well known that workers’ comp premiums can be a heavy burden on small employers, sometimes making up a substantial portion of their overhead. For a small restoration contractor, being misclassified in a high-risk insurance category can mean thousands of extra dollars in premiums each year – money that could otherwise be spent on hiring staff, upgrading equipment, or marketing their services.

By right-sizing the insurance rates to match actual restoration risk, a dedicated NAICS code helps level the playing field. Small and mid-sized restoration firms would no longer be unfairly squeezed by insurance costs disproportionate to their work. This improved cost structure means they can bid more competitively on jobs (since they’re not padding bids to cover exorbitant insurance), invest in growth, and better withstand economic fluctuations. In the long run, the entire restoration industry benefits: companies can reinvest savings into their businesses and employees, leading to stronger firms that can deliver even better service in times of disaster. Essentially, fair workers’ comp rates driven by a proper NAICS classification will bolster the sustainability and competitiveness of restoration contractors across the board.

Integrating these insurance-related benefits into the argument, it becomes clear that establishing NAICS 624231 Emergency Restoration Services isn’t just about bureaucratic categorization – it’s about tangible, real-world advantages for those in the restoration field.

Proper classification means accurate risk assessment, safer workplaces, data-driven insurance pricing, and reduced costs, all of which fortify the industry’s foundation. By reducing workers’ comp premiums and related risks, a unique NAICS code would not only acknowledge the specialized nature of restoration work but also help those businesses thrive. This change would empower restoration professionals to focus on what they do best – responding to emergencies and restoring properties – with fewer financial headaches.

In sum, a dedicated NAICS code aligns the restoration industry for greater safety, fairness, and economic strength, proving that this advocacy effort could pay dividends in both recognition and dollars and cents for years to come.

By Andrew G. McCabe Founder, Claims Delegates Insurance Claim Expert & Advocate for Restoration Professionals

RestorationRebelAlliance.com WaterDamageProfit.com ClaimsDelegates.com

Sources for Worker's Comp Premiums and Risk Classification

1. National Council on Compensation Insurance (NCCI) – Provides industry classification codes and actuarial data used in setting workers' compensation insurance premiums. (www.ncci.com)
2. U.S. Bureau of Labor Statistics (BLS) – Occupational Injury and Illness Data – Tracks workplace injury rates by industry sector. (www.bls.gov)
3. Insurance Information Institute (III) – Worker's Compensation Overview – Explains how workers' comp premiums are determined. (www.iii.org)
4. State-Specific Workers' Compensation Rating Bureaus – Each state has a rating organization that provides industry classifications and loss cost data. Examples include: California Workers’ Compensation Insurance Rating Bureau (www.wcirb.com) New York Compensation Insurance Rating Board (www.nycirb.org)

Sources on NAICS Codes and Industry Classification

1. U.S. Census Bureau – NAICS Manual – Defines industry classifications and their purpose. (www.census.gov/naics)
2. Office of Management and Budget (OMB) – NAICS Revision Process – Details how NAICS codes are updated. (www.whitehouse.gov/omb)
3. Restoration Industry Association (RIA) – NAICS Code Initiative – Official RIA statement on the push for a dedicated restoration NAICS code. (www.restorationindustry.org)

Sources on Workplace Safety and Insurance Costs

1. Occupational Safety and Health Administration (OSHA) – Sets safety standards for different industries and tracks workplace hazards. (www.osha.gov)
2. Centers for Disease Control and Prevention (CDC) – National Institute for Occupational Safety and Health (NIOSH) – Provides research on occupational hazards in restoration work. (www.cdc.gov/niosh)
3. Institute for Work & Health (IWH) – Researches workplace injury prevention and insurance cost reductions through safety initiatives. (www.iwh.on.ca)