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Hybrid Premium Audits Good Bad Points With Technology Assistance

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Hybrid Premium Audits May Become Future of Audits (Almost)

Most Hybrid Premium Audits on a Workers Comp policy are when the insurance company auditor asks for the material required to perform the audit without visiting the client’s business. As the Internet has made the flow of information much easier, hybrid audits can take many forms.

Graphic Of Hands Hybrid Premium Audits With Gold Coins
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They are becoming more popular as a cost cutting measure for the insurance carriers to save on travel and personnel costs. Hybrid Premium Audits may become more popular over the next few years.  The advancements in technology such as PDF’s reduce the size of an emailed document.

A Premium Auditor performing a hybrid premium audit may request a scan of all the required material be emailed to them for review. There is basically no cost to the insurance carrier or employer if all documents are scanned.

One of the concerns over this type of audit is the insured employers have to send data outside the company versus a physical audit.  Many states require an in-person physical audit.  The hybrid audit may not suffice due to that rule.   Some employers have favored this type of audit to reduce the stress of a physical audit.

One area to make sure that remains constant throughout a hybrid premium audit is your company has to appear accurately on paper.  The documentation has to show that for instance, a certain work performs certain job duties the same as if the premium auditor had performed an in-person physical audit.

Lately, one area of concern consists of subcontractors and staffing agency supplied temporary employees.  The premium auditor has to know without a doubt that these subcontractors and temp employees are not your company’s responsibility for workers compensation coverage.

As time passes,  we shall see the success/failure of using hybrid premium audits.

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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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