What is the Applicant's industry classification (NAICS / industry select)?
This field sets your base rate before a single control is read, and a wrong classification is expensive in both directions.
What the carrier is actually asking
The carrier wants your industry classification, usually as a code or a menu selection. It determines the base rate, the appetite, and sometimes whether the submission proceeds at all.
Why it is underwritten
Loss frequency and severity differ enormously by sector. Healthcare, education, public sector, and professional services carry very different profiles, and carriers maintain appetite by class. The classification is the first filter applied to your submission.
Where the answer lives in Microsoft 365, Entra ID, and Azure
This is a factual disclosure and it should match your other filings.
| Platform | Where the setting lives | What has to be true |
|---|---|---|
| Filings | The classification used in tax and regulatory filings | Consistency, since an inconsistency between filings and the application is difficult to explain. Attested |
| Revenue | Revenue split by activity | The classification reflects the largest activity rather than the one you identify with |
| Operations | Secondary activities that carry different risk | Disclosed separately, since a secondary line can carry the majority of the exposure |
| Public presence | How you describe your business publicly | Consistency with the website and marketing, which is easily checked |
| Policy | The classification recorded on the policy | Correct on the schedule, since an error there can affect a claim |
Choosing a lower-rated class because it seems close enough is a misrepresentation of a fact material to the rate. If the loss arises from the activity that was not disclosed, the carrier has a straightforward argument. Disclose the real activity and, if the rate is unattractive, address it through structure rather than through classification.
What a defensible yes requires
- The classification matches your regulatory and tax filings.
- It reflects the activity generating most of the revenue.
- Secondary activities with different risk profiles are disclosed.
- It is consistent with how you describe yourself publicly.
- It appears correctly on the policy schedule.
How this answer goes wrong
A technology company that provides managed services classifies as software, which is rated differently and carries different appetite. If a claim arises from the services work, the disclosure question becomes material.
Frequently asked
What if we span several industries?
Use the primary revenue-generating activity and disclose the others. Carriers can accommodate mixed operations when they know about them.
Can we choose a favourable code?
Only if it is accurate. Selecting a class that does not describe your operations is a misrepresentation of a rating factor.
Does the code affect coverage?
It affects rate and appetite, and it can affect how exclusions apply. It is worth checking the schedule after binding.
What if our business changes?
Tell the carrier. Material changes in operations are usually disclosable during the policy period as well as at renewal.
Related questions
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