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Seven Premium Audit Resolutions For Smooth Premium Audit

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Seven Premium Audit Resolutions

The seven premium audit resolutions to reduce stress are below.

As the premium audit season rolls around every year, I usually post quite a few articles on the subject.   The reason that this time of the year is called premium audit season is that most policies renew and expire on January 1st.

Picture Of Notes And Pen Seven Premium Audit Resolutions
Wikimedia – Photos public domain.com

Your company does not want to stand out from the pile of audits that the premium auditors face every week.  For the most part, Workers Comp premium auditors are overloaded as are most insurance company personnel.   They are usually on a very tight schedule.

Premium audits are usually scheduled not long after policy expiry.  Even if your current policy did not expire on January 1, the list can be useful whenever you are audited in the upcoming year.

The seven best premium audit resolutions for your company are:

  1. Organization is the key.   An unorganized group of records will immediately indicate to the auditor that the audit should at least be yellow-flagged if not red-flagged.  How can your company have accurate payroll and company records if they cannot at least be pulled together for a premium audit?
  2. Read the audit records request letter very carefully.
    Reading Seven Premium Audit notes
    Wikimedia Commons – Ragesoss

     An easy way to start the records organization process is the letter the insurance carrier’s audit department will send usually 21 – 30 days before the audit appointment.   Almost all policies require your carrier to allow enough time for your company to amass the records.   You can ask for the audit to be delayed if the records request letter does not arrive or runs very late.

  3. Spreadsheet programs are crucial.   The best method to undertake #1 above is to use a spreadsheet (usually Excel) program.  You can use the audit letter #2 as a basis for records organization.
  4. Spreadsheet/audit info must be accurate.  One of the pet peeves of a premium auditor is the spreadsheet and the supporting documentation does not match.  Checking to make sure the info matches will save the auditor and your company a large amount of time and effort retracing the requested info.
  5. An office contact will save many headaches. Make sure you have one and only one person  to answer any of the premium auditor’s questions and to provide any additional information. The contact must understand the records that were provided to the premium auditor; the company’s operations in full;  and the company financial records.
  6. Graphic Seven Premium Audit Number
    StockUnlimited

    Review your premium audit bill very closely.  The bill should arrive within 21 days after a premium auditor has finished your audit.  If there is anything in the bill that concerns you, then you should contact the carrier (by letter).   The time clock is running once the premium bill is issued.  The explanation for any additional charges should be attached to the bill.  Only contacting your agent may forfeit some of your rights.  The policy spells out what you need to do if you thing your company has been overcharged on premiums.  The policy is a contract you must follow.

  7. If you feel that you are in over your head or are running out of time on a premium audit bill grace period, you may want to consult a non-agent expert.  There is nothing wrong with not understanding the policy, audit, or premium audit bill.  They can be highly complicated in certain circumstances.

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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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