If you're a business owner who carries workers compensation insurance, you're no doubt familiar with the headache and stress that can come from the insurance company's premium or payroll audit. These audits, which determine your business's workers compensation insurance premiums, can end up costing you thousands of extra dollars for the insurance period that you hadn't planned on, making it worth your time to carefully prepare your paperwork to avoid any mistakes in reporting to the auditor during the auditing process. The following will help you organize before an audit to help alleviate the stress of the process and ensure that you keep your premiums down.
Look Over Your Current Policy
As soon as you become aware that an audit is upcoming, carefully go over the current policy and pay specific attention to what criteria was used to set the premiums for your workers compensation insurance. Compare your payrolls, classifications, and rates at the time the original policy was drafted to your current ones.These will give you a baseline that you can use when discussing with the auditor any changes they decide should be made in your premiums or policy.
Gather All Records
The last thing you want is to have a busy auditor upset with you because they have to sit and wait for you to rifle through files to find the documentation that they're requesting. Pull together your insurance certificates for subcontractors and independent contractors, employee records (including work hours and responsibilities), labor and material cash disbursement, and payroll (including unemployment, taxes, and overtime). If you've been audited by the same insurance company before, gather and look over the paperwork from last time--this will give you a good idea of what documentation and information the auditor is likely to request this time.
One of the most helpful and important things you can do is to separate and make clear overtime work hours and different class codes of employee work. These can go a long way to helping you maintain, or perhaps even discount, the premiums of your workers compensation insurance.
Update All Public Information
Anything that the public can see, the auditor can see, and some of this information could affect if the auditor decides your premiums should go up. Make sure that information on your company website, advertisements, flyers, etc. all accurately represents the kind of work your business is currently doing.
Prepare an Auditor Work Space
You want to be able to answer any questions the auditor has, provide any clarification necessary, provide any additional documentation that an auditor needs, and look over copies of the auditor's work yourself, so you'll want to have the auditor working on-site for the duration of their audit. Prepare a work space for them that will be comfortable and conducive to a productive audit, meaning it is well lit and easy for the auditor to contact you from with questions or to request documents. If the auditor will not be able to stay at your business to perform the audit, make sure you are readily available by phone (or video chat) to address anything that may come up during the offsite audit, and be sure to get a copy of the completed audit worksheets.
Being audited by your insurance company will probably never be a pleasant experience, but it doesn't have to be stressful, either. By taking a few steps beforehand, you can make the process easier both on yourself and on the auditor. If there are any problems with your audit, or if you disagree with the auditor's conclusions, speak with a workers compensation attorney as soon as possible to ensure that you're not paying more than you should for your company's workers compensation insurance.
If you still have questions about handling workers compensation for your company and employees, click here for info on workers comp attorneys in your area.