This question comes up quite often and resurfaced again just the other day. You can find many answers to workers comp questions like these at WorkCompConsultant.com so be sure to visit!
To answer this question, under normal circumstances, we have to look to policy wording for guidance.
Look in the standard workers compensation policy for Part 5, Section G, titled “Audit.” Within this section it states that you, the insured policyholder, will allow the insurance company to examine and audit all your records that relate to this policy. It goes ahead and states what those records may include. Read a little further and it states they, the insurance carrier or their representatives, may conduct the audits during regular business hours during the policy period. It also states they may conduct audits within three years after the end of the policy period.
So the wording found within a standard workers compensation policy gives the insurance company the right to conduct an audit or audits within three years after the policy period ends.
Special circumstances may also apply. If an insurance company suspects fraud or fraudulent activity regarding the information provided which they relied upon to set up the policy they may seek legal remedy and this whole question will be resolved in litigation.
Hope this helps out!
Thanks!
