Workers Compensation Audits

Workers’ Compensation Insurance Audit Services

When you have workers’ compensation coverage, you should know that you can be audited. Insurance companies want to ensure that you are operating your workers’ compensation program fairly. If you are facing an audit, here are some things you can do to make it run more smoothly.

Unlike other types of insurance premiums, workers’ compensation insurance premiums are estimated. The insurer determines the premiums based on several different factors including:

• Wages
• Employee class codes based on job descriptions and employee location
• Independent Contractors

If an insurer does not think that their estimated workers compensation premiums were correct, they can request an audit. The purpose of this workers compensation insurance audit is to ensure that your workplace matches the estimates the insurer used to determine your insurance. If not, the insurer will adjust your premiums up or down to match your actual work environment.

You may have a physical audit or a voluntary audit. In a physical audit, the insurer will perform the audit at your premises. In a voluntary audit, you fill out the audit form and supporting documentation. Usually smaller businesses can do voluntary audits, but insurers will send people to perform physical audits at larger firms. Worker’s Compensation audits usually occur after a policy as expired.

During a Workers Compensation Audit, you may be asked to provide

• Payroll records
• Certificates of insurance for subcontractors and contractors
• Employee records
• Cash disbursements
• Business Operations

In many instances, workers’ compensation insurance audits are required by law. Failure to comply can result in policy cancellation or a surcharge for failing to cooperate.

Workers Comp Audit Tips

You want your estimate to match your actual workplace because you do not want to owe more at the end of the policy, and you do not want to overpay. Here are some tips to make sure your premiums are correct

• Make sure your payroll information is correct
• Include deductions
• Ensure that employees have the right class code, based on job and location
• Use a program to keep your paperwork straight
• Make sure contractors and subcontractors have their own certificates of insurance

At Capstone Coverage, we unfortunately cannot do anything to make the workers’ compensation audit process pain-free. However, by helping you evaluate your workers’ compensation insurance needs, we can make sure you provide the right information to your insurer, so that your premium estimates are close to your actual premiums. Our attention to detail can help make the audit process run more smoothly, so you can focus on your business.

Categorized in: Blog, Business Insurance, Workers Compensation Insurance