Workers compensation audits are a routine part of every day activity for many insurance agencies, insurance carriers or companies and auditors. But from an employers point of view the audit process can be intrusive, confusing and a bit scary especially when it comes once a year and getting past the audit may be the only thing on an employers mind. So what’s the benefit of having your audit reviewed once it’s been completed? Lets talk.
Workers compensation audits are full of data. They include rating codes, payroll, overtime, and information on payments made to subcontractors along with detailed information on the entity structure of the employer. They include information on the inclusion and exclusion of certain classes of employees. They include interpretation of employee classification. And they include errors and mistakes found in each of these areas.
Audits are simply the way an insurance company can determine the accurate premium to charge an employer. Final audits are always completed after the expiration of the insurance policy. As a side note, some insurance companies will conduct audits shortly after they write the policy in order to verify the accuracy of the information used to set up the policy. This may not be such a bad idea! After all, wouldn’t it be better to have the rating exposures and codes set up correctly at the beginning of the policy and be able to avoid the headaches of trying to correct an audit with errors? Read more detailed information about workers compensation audits and the audit process at our website.
The audit review is a tool that an employer should use to verify the accuracy of the audit information and how that information was used to calculate their final premium.
How can you know if you should consider having an audit review completed? Here’s a few questions to ask yourself:
- Did you receive an unexpected bill for additional premium?
- Were class codes added to your policy after the audit?
- Were payrolls reassigned to different class codes?
- Did you use any subcontractors during the policy year?
- Did you change or add services to your operations during the policy year?
- Was the audit conducted on the site of your operations?
- Did the auditor interview you or some other person?
- Was your audit a mail in self audit or telephone audit?
- Were there any changes made to your policy as a result of the audit?
These are just a few things that may tip you off that an inaccurate audit was conducted.
The point of this blog is that when it comes to your workers compensation insurance and the cost that comes with this product, there are specific processes that you, the employer, should pay close attention. The audit process is one of the critical points. The audit is what ultimately determines your final premium. There are very common errors that occur during this process with frequent regularity and it’s those very errors that may cost an employer untold additional premium dollars.
So here’s a real life tip: Have your workers compensation audits reviewed by an independent workers compensation consultant! What’s the harm? Afraid of the cost? You may be surprised to find audit reviews are not costly. The benefit for your business will be well worth the small cost to discover costly errors in how your audit was conducted.
Need help with a workers compensation audit? Be sure to contact a workers compensation consultant!
Hope this helps you out and thanks for reading!