Waived Premium Audit May Not Be Great Sign For Employer

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Waived Premium Audit May Not Be A Good Idea

The Waived Premium Audit allows an insurance to not perform a yearly audit. I have come across situations lately where the insurance carrier has decided to waive a Workers Comp premium audit and not even attempt to audit the payroll and premiums. Almost all the employers think this is a great relief on the level of avoiding a tax audit.

Picture Of Laptop Pen And Calculator Waived Premium Audit Calculation
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I would suggest taking a step back before agreeing to this type of audit. Insurance carriers are very adept at collection premiums for their services. If a carrier decides to waive a premium audit, does that mean that your company has been charged the correct premium? Does it mean that the carrier has decided to not collect additional premium? The answer is usually no in both cases.

Most states REQUIRE the insurance carrier to perform a year audit unless the employer signs off on a waiver. Some states do not allow waivers of the premium audit. 

How does a company know whether or not to waive a premium audit? It is best to call in a non-agent professional to look over the situation. Your company may be leaving money on the table.

As I have said very often, almost all insurance carriers and premium auditors are very honest and upstanding parts of the insurance process. Would licensing premium auditors help in this situation? I would have to say yes.

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Table of Contents

James Moore

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Mgmt Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications

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