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Premium Audit Offer Warning To Employers – Not Before Carrier Audit


Offer Warning –  Premium Audit Before Carrier Audits Policy

A certain type of premium audit offer warning for our blog readers was required after two phone calls received on this illegal type of offer this week.

As I have discussed many types; and as you will see in the heading of this article, we, of course, perform audits for employers and governmental agencies. Our audits are basically a review of the last three years for policy overcharges. This is one of a group of our services.

Graphic of premium audit Offer Warning Sign
(c) 123rf.com

I have received two phone calls this week that were disturbing, to say the least. One employer from CA and another from WV both called to ask about a service where the auditor would come in and basically set up the business book BEFORE the premium audit by the insurance carrier. This is highly illegal.

There is nothing wrong with going over the premium audit with or without a consultant after the premium auditor finishes their audit and produces a premium audit report.  

From what I could gather, the so-called premium auditing company’s goal was to lower the premium BEFORE THE AUDIT. That is a good way to spend time in jail. I had written about this type of unscrupulous audit here and here. The company owner and the premium auditing consultant are now both doing hard time in a South Carolina prison.

Honesty is always the best policy when dealing with insurance company premium auditors. Your company should pay every cent in premiums you owe, but nary a cent more.

These types of bad-actor companies give the premium auditing and risk management consulting professions a bad name to say the least. Do not end up being accused of the “F” word in insurance. California has added some very strong laws dealing with this subject. I will cover that next time.


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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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