Here’s another good question from my inbox:
Your partner’s commercial insurance quote application is asking me for my SIC code. What is that?
SIC stands for Standard Industrial Classification. Developed in the 1940s and last updated in 1987, the SIC system assigns a two, three, or four-digit code to practically any conceivable business activity. Many insurers who offer business coverage specialize in one or more broad business areas. As a result, a company’s primary and secondary SIC codes are often prominent items on the insurer’s application.
Also, be aware of a related term: NAICS. Developed jointly by the U.S., Canada, and Mexico, the North American Industry Classification System (NAICS) replaces the SIC system with six-digit codes and hundreds of new categories that reflect the modern business world.
Although NAICS officially replaced SIC in 1997, most insurers have yet to adopt it on their applications. Look for that to happen right about the time NAICS is replaced by something else in the future.