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.
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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