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Premium Audits For Public Employers Now Due


Public Employers Workers Comp Audits Now Due

The public employers are due for a  premium audit very soon.

Picture Of Woman Public Employers Holding Files

A large number of our clients are public entities. Most of them are self-insured or at least partially self-insured. There are still a large number of smaller public employers that buy regular insurance from the marketplace.

Most public employers’ budgets cover from July 1 until June 30 of the next year. There is a schedule that most insurance carriers follow. Usually, within 60 days after a policy has expired, the insurance company auditor will visit and audit the books to set a final premium.

One area that seems to cause a large amount of confusion about public employer premium audits is the area of subcontractors. As there are usually many departments in, for instance, a school district, there can be many independent contractors working simultaneously. If the premium auditor is left to guess if the worker is an employee or subcontractor, they are almost always going to designate the worker as an employee.

Certificates of insurance should be obtained from all subcontractors and be attached to their contracts. We have recently seen that even though the contractor’s employees were working under a certificate of insurance and a contract, they were still ruled as employees by the auditor. Providing these to the premium auditor may save headaches and $$.

Picture Of Public Employers With Couple Having Discussion

Certificate of insurance tracking is also important. If the subcontractor’s certificate of insurance and policy expire during their contract, a current one must be obtained immediately. A premium auditor may designate the subcontractor as an employee if their certificate of insurance expires during the subcontract.

A suggestion is that a person be designated to keep track of the subcontracts and the certificates of insurance. A diary system such as Outlook(R) can be used to track certificates of insurance expiry.

 Why I am particularly sensitive to certificates of insurance is that one of the local school systems had a subcontractor working for them for several years. Their task was to remove trees and shrubs. The certificate of insurance had expired two weeks before the subcontractor fell off a ladder, landed on his head, and passed away after three weeks in the ICU.

 The school system had to pay a death claim and extremely large hospital bills out of their budget as their carrier denied the claim. I think their workers comp carrier did finally pay some of the bills but then canceled them mid-policy.

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James J Moore - Workers Comp Expert

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Management 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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