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Audit Dispute With No Explanation Can Create Bad Vibes

A premium audit dispute with no explanation of why it was disputed can wreck your Workers Comp system.

Picture Of Working Couple Audit Dispute With Accountant

We are quite often brought into a dispute that an employer has with their insurance carrier’s audit.   One caveat to disputing a premium audit is doing so without any documentation other than “the bill increased greatly” or “we are just paying too much for Workers Compensation insurance.”

No carrier, Insurance Commissioner, or Rating Bureau (NCCI, WCIRB, etc.) has ever said to dispute a premium audit without reason was akin to fraud.  However, we have noticed the insurance carriers are much more assertive when an audit dispute is undertaken with no reason or premium dispute calculation.

Delaying a premium audit bill payment by using a dispute is slowly becoming a thing of the past with many carriers.  I had advised against this numerous times in this blog.  A business owner’s or risk manager’s gut feeling that something is wrong with their policy or audit is very often a legitimate concern.  No person or business knows your business better than you do overall.

We have not seen any carriers that will just cancel an insured because they have raised a dispute, even if there is no documentation as to the reason.  That environment is changing somewhat as carriers have been very patient as they do not want to lose a customer – plain and simple.

However,  an unfounded dispute puts the insurance agent in a predicament and can tarnish the relationship between a carrier and their insured employer.

Man Doing Audit Dispute Calculation

The old “ducks in a row” adage is very accurate in these cases.  Also, any undisputed premiums have to be paid regardless of the dispute.  The calculation of the amount of the dispute is critical as the employer is supposed to pay the undisputed premium timely.  That rule is in every Workers Comp policy written today.

Timely audit disputes with the reasons for the disagreement along with the proper calculations will go a very long way in proving your case to the insurance carrier.

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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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