Workers Comp Audit Stress Reducer
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Estimated Premium Audits For Non Compliance Costly Proposition


Estimated Premium Audits Not Sound Judgement By Employer

Estimated Premium Audits for non compliance costs many employers dearly.  Premium audit bills and notices generate most of the calls and emails we receive on a consistent basis.  The first question that is asked usually concerns allowing the premium auditor to examine their books.   The issue of privacy comes up often with the numerous reports on the NSA.

Picture of Estimated Premium Audits Concept

The best way to pay what your company rightfully owes (and not a dollar more) is great preparation and organization using a basic spreadsheet app.

The best way to do this is to have everything in the initial premium audit letter available to the auditor.  Spreadsheets that summarize the payroll records can be helpful.  Being organized is the key.

The rules for audits are usually in your policy.   Most states allow the auditor to TRIPLE your estimated audit.   The key here is “estimated.”   What constitutes estimated an estimated premium audit amount?   The rules allow much of your final estimated premium audit bill to be up to the premium auditor.   This is the person you have ignored for a number of week or months.

If your company is in the situation, you should contact the auditor and schedule a date.   Make sure you document when you called the audit and the subject of your conversation.

Picture Businessman Holding Two Documents Estimated Premium Audits By Employer

We have seen estimated audit bills where the premiums were five to eight times the normal amount.  As I mentioned in the last paragraph, your company is leaving much to the premium auditor by not agreeing to let him/her do their job.  The rating bureau rules allow them to examine any of your company’s financial records.

All workers’ compensation policies have a section on this process.   Take out your original policy.  You will find that section towards the end of the policy documents.

The only way to actually reduce an estimated premium audit bill is to allow the audit that was going to occur in the first place, except now your company has a big, tall red flag on the information you will be providing to the auditor.

If, after the premium audit, you feel there is something wrong, you may dispute the audit figures.   We have never assisted any employer in how to present the figures to a premium auditor.

There is a very large group of articles on this blog in reference to premium audits that you can read for free.  You may print them out as needed.

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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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