Understanding the Workers Compensation Audit Process

Understanding the Workers Compensation Audit Process

Has your Workers Compensation carrier audited you yet? Although it seems like just one more paperwork headache, it’s a process that is mandatory and can have very expensive consequences if not complied with. Good preparation for the audit will help you to be able to comply with the auditor making the process less painful.

Below are some tips for before, during, and after the audit.

Before the Audit

Before the premium auditor arrives, an employer should decide who will be the primary contact person for the auditor. The primary contact should be a someone who is very familiar with the work done by ALL departments, employees, and payroll.

The primary contact should review the original policy to see how the initial estimated premium was calculated.

Things to look at:

  • classification codes
  • rates
  • payrolls used to compute these initial premiums.

Keep your website up-to-date and accurate since it’s very likely that the auditor will be looking at it prior to the visit to your office. If there is anything misleading or out of date regarding your operations or the nature of your business, fix it.

Incorrect or misleading information can cause the auditor to apply an incorrect classification that may increase the premium of your Workers Compensation policy improperly.

When the Auditor Arrives

It’s recommended that the audit take place while you or the primary contact person is present. If the auditor has any questions, your accountant would not be able to accurately answer them.

Working off site? Make sure the company’s contact person is available by phone to answer any questions. Your Workers Comp’s fine print gives the insurance auditor the right to demand virtually any documentation that might affect the premium.

Yes, it’s frustrating but it’s always better to maintain the relationship with your auditor a professional and cordial one.

After the Audit

When you receive the actual audit billing statement, review it and compare it to the original policy. Classification codes on the audit should not include any more expensive classifications that weren’t on the original policy, unless there has been some change in your operations.

Feel like something needs to be disputed or reviewed? You have the right! Contact your carrier and ask them what steps have to be taken to dispute the audit that was done.

Tell us when was the last time you had your Workers Compensation insurance reviewed! CWI Underwriters has been helping Fort Lauderdale businesses for more than a decade in understanding their Workers Compensation policies. We are available to answer any questions you may have! Give us a call!

Skip to content