Ready for Your Workers' Comp Audit? Simplify & Stay Prepared.
Audits
Workers' compensation audits are essential annual reviews conducted by insurance companies to verify payroll, class codes, and subcontractor exposure. These audits, which can be physical or voluntary, help determine the accuracy of estimated premiums and reconcile them with actual data from the policy period.
Preparing for an audit involves gathering relevant records and familiarizing yourself with classification codes. Engaging with the auditor and understanding the process can ensure a smooth experience, leading to accurate adjustments and minimal disruption for your business.
Understanding Workers' Comp Audits
- Annual review conducted by insurance companies
- Verifies payroll, class codes, and subcontractor exposure
- May be performed in-person, by phone, or via mail
Preparing for a Workers' Comp Audit
- Gather payroll records, employee information, and business documents
- Ensure certificates of insurance for subcontractors are up-to-date
- Familiarize yourself with workers' comp classification codes
Types of Workers' Compensation Audits
- Physical audit: conducted at the business location, typically for complex businesses or larger premiums
- Voluntary audit: completed through mail, usually for simpler businesses with smaller premiums
Navigating the Audit Process
- Make the auditor's job easy by being prepared and providing accurate records
- Separate employee payroll by class code and account for overtime pay
- Engage with the auditor and review any worksheets they prepare
Audit Outcomes and Adjustments
- Final audit statement sent to the policyholder, indicating additional premium or credits
- Adjustments may occur due to payroll changes or misclassified employees
- Non-compliance may result in penalties or increased premiums