Unfortunately, this is a common question! And when it comes to understanding the workers comp audit process it seems that so much still remains a smoke and mirrors situation for so many employers.
Whether it’s because an employer didn’t read their policy or the documentation that came along with the policy when it was sent to them by the insurance company; their agent did a poor job of explaining the way the workers comp premium calculation and audit process works; or incorrect assumptions of understanding made on an employers part, all can lead to unexpected premium adjustments after a workers compensation audit is completed.
It’s my experience that most of the problems that come from the workers compensation audit process are directly related to the poor job of teaching the employer about how the process works. When armed with knowledge of the process and open communication with the insurance agent or broker an employer should rarely be surprised by the outcome of an audit.
So what can you do? Here’s a few things to consider but first ask these questions:
- Why do you think the audit is incorrect?
- Was the audit completed at your premises?
- Did the auditor complete the audit or just gather information and complete it later?
- Did you sign an uncompleted audit?
- Did the auditor discuss your business operations?
- Did you provide payroll information by employee by job class?
- Did you use uninsured subcontractors?
- Did you have an increase in your payroll that would justify the increased premium at audit?
- Were your employees properly assigned to the correct classification codes?
- Were your class codes changed by the auditor?
For more information on the top ten audit mistakes and errors be sure to visit our website.
Here’s a few things you SHOULD NOT DO if you’ve received a bill from your insurance company for additional premium because of your audit:
- Do not refuse to pay the bill! Rather you must follow the proper steps in filing an audit dispute.
- Do not assume the additional premium is correct! Rather if you feel there is a problem check with an independent workers compensation premium audit consultant for help.
- Do not assume changes made to your policy at audit are correct or even allowed. Specific rules apply as to what an insurance company may or may not do at audit.
So if you’ve been presented with a large premium audit bill and you feel your workers comp audit is incorrect have it checked out by an independent consultant!
Hope this helps out! Thanks!