Can a workers compensation insurance company adjust an audit or re-audit a business?

Yes. An insurance company may conduct a re-audit or make adjustments to a completed workers compensation audit. It’s not that common and actually a bit unusual but it does happen and if you think about it, an audit dispute filed by a policyholder is just that, a re-audit or adjustment. But let’s take a look at a standard policy and how it responds to this question.

Remember how a policy works? It’s a contract between the policyholder employer and the insurance company where both parties agree to perform. The insurance company agrees or promises to pay workers compensation claims and the policyholder agrees or promises to pay the premium in exchange for the insurance companies performance. Pretty simple but you must remember that a workers compensation policy is a contract and when an employer signs up for coverage and pays his premium he has agreed to the terms and conditions of the policy.

You’ll find within Part 5 – Premium – G. Audit – of a standard workers compensation policy a description of how an audit may be conducted. It states within this section that we, the insurance company, may “conduct the audits during regular business hours during the policy period and within three years after the policy period ends.” It’s this section that gives the insurance company a three year period of time to audit your business. Nothing here limits the number of audits that may be conducted.

This will apply for most but not all states. There are rules that apply to the audit process and that may differ by the state involved. For example California typically has a two year limit, the current year plus one year back. In Ohio, a monopolistic state, the current year and two years back. So be sure to research how the time limit may apply in your state. 

Hope this helps you out! Thanks!