Audit Issues with Workers Compensation Coverage
What could possibly go wrong with my workers compensation audit?
I received a copy of an audit statement from one of our work comp companies that went to my client. It seems that they had increased his work comp audit premium over time.
Workers compensation carriers (companies) will reconcile their issued policies at the end of the policy year to make sure that the payroll estimated at the start of the policy gets adjusted to the actual payroll that was paid during that policy year. The adjustment will usually involve either a payment request or a refund, depending on actual payroll vs. estimated.
This is where things often go awry. Incorrect classifications, misunderstandings of reported payrolls, incorrect inclusion of owner’s payroll, and many other issues can cause the audit statement to be incorrect. It is critical that your agent ask you if the payroll seems right, and to notify you immediately if it is not. Also, your agent must review the details of the audit to make sure that the rating characteristics included in the audit are correct as he/she understands them.
Once certainly does not want to pay the insurance company more than is owed. It requires diligence and attention on the part of the agent to protect his client from unduly high premiums.
Want to have us review your coverage? please contact us. We have been doing this for nearly 30 years, and we keep an eye on your money.