The workers compensation premium audit process is the act of reviewing your books at the end of a workers comp policy to discover and document the actual exposure generated by your business during the policy period. …Sound like insurance talk? Sorry about that!
Be sure to visit the Workers Compensation Audit Review page on our website for more detailed information!
The workers comp premium audit is a neccessary part of the pricing mechanism for this type of insurance policy. You see, a workers comp policy is originally set up using only an estimated payroll or remuneration as the exposure base. Then after the policy expires the insurance company will examine your books and determine the actual exposure and adjust your premium accordingly. That means your premium for the expired policy will either be more…or less than the original estimated premium…but should really never be the same.
The premium audit process is similar between different insurance companies. You’ll find an insurance company may conduct several different types of premium audits which may include the self-audit, the telephone audit and the physical audit. Each of these audit types carries its own level of accuracy.
If you’re an employer, take some time to learn about the premium audit, what it means to you and how you should prepare. And yes there are some things you should do to prepare for a workers comp audit.
Remember, when it comes to conducting a premium audit, it’s supposed to be all about accuracy. Unfortunately it seems that many audits turn out to be a competition between the insurance company and the employer! And usually a NO-WIN situation for both!
Be prepared. If it’s a physical audit, where an auditor actually visits your office or place of business to conduct the audit or a self audit or telephone audit being prepared and knowing the process is important to any employer. Get your ducks in a row, have the information requested readily available for the auditor. If it’s a telephone audit, have the information available and be ready to answer questions the auditor may have for you.
Hope this helps you out! Thanks!