How does the SIC or NAIC codes effect whether your business is characterized as High Risk, Moderate Risk or Low Risk?
NAIC CODE/SIC CODE CAN GET YOU FLAGGED AS HIGH RISK
NAIC/SIC CODE AND THE HIGH RISK CLASSIFICATION
Your business may get red flagged by D&B solely based on the industry of your business. Imagine that!
A likely way to red flag your business is to select an SIC code/NAIC code that is considered an high risk industry. SIC stands for Standard Industrial Classification. The other is called NAIC; North American Industrial Classification.
Important issue here! D&B uses the outdated SIC code because the government uses SIC. It was outdated in 1997 because many industries were created, that didn’t fall under the SIC. NAIC was a better fit. D&B uses SIC because they report and sell data to the IRS and the federal government. In other words, if your tax return information doesn’t match up to what D&B collected about your business, the business may be audited.