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.
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.
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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