Do your clients know their policy is auditable? Make sure they comply with the workers’ compensation audit process.
Workers’ compensation is unique in a lot of ways. First off, it’s the only coverage most businesses are required to carry. Beyond being illegal to forgo, workers’ comp is different that most other policies because it’s auditable. If one of your clients ends up undergoing the workers’ compensation audit process, there are a few things you should know.
First and foremost, they need to be prepared to pay a little extra money. Let’s say that their policy started based on a payroll projection of $200,000. The premium they’ve paid has been based on that number, but if they come to the end of that policy term and their insurer learns actual payroll was $300,000, they’ll likely be audited. That policy will be recalculated, and your client could be sent an audit bill for the additional premiums due to cover the extra $100,000 in salary.
The good news? Your client could actually benefit from the audit. For example, if payroll was calculated at $200,000 but actually ended up being $150,000, your client could get a return in premium from the carrier.
The best advice you can give your clients is to comply with every step of the audit process. It can be tempting to gloss over the required paperwork, but it’s worth giving a little extra care to see if premiums can be retroactively reduced.
The workers’ compensation audit process usually isn’t easy. It could leave your client with a wealth of questions. If you find yourself needing help responding to those queries, contact PMC Insurance Group today. On top of our workers’ comp programs and products, we offer ongoing support and agent resources to help you! Our goal is to ensure you’re equipped with the knowledge and tools you need to expertly handle any workers’ compensation audit processes you face.