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Premium Audit Disputes and Collection Agencies Warning


Premium Audit Disputes Warning

Since the first of the year, a large number of inquiries on premium audit disputes from employers with premium  audit disputes.

Graphic Of Warning Sign Premium Audit Disputes Icon
(c) stockunlimited

I am not sure if insurance carriers by contract can do this – but a large number of disputed bills are being forwarded to collection agencies for final collection.  This seems to be an ever increasing trend.

There are a few ways to avoid this situation:

  • Pay any undisputed part of the bill.  One of the conundrums in disputing a WC audit bill is establishing how much your company owes the carrier that is not in dispute.   Every Workers Comp policy has a clause in it that requires payment of the undisputed premium.
  • Just to be safe, it is recommended that you respond to the credit bureau by certified return receipt mail as soon as possible and cc: the carrier’s audit department.
  • If the carrier’s collection department also sends your company a request for payment, respond to them ASAP in writing with certified return receipt mail regardless of any collection agencies.
  • Do not use the audit premium dispute process as a way to delay paying a bill that your company actually may owe.  This will ruin your relationship with your agent and the carrier.
Picture Human Palm Held Up Premium Audit Disputes Warning
(c) stockunlimited

One of the big mistakes concerning premium audit disputes is to let a collection letter from a collection company sit or destroy the letter.  If you look at usually the back of the letter – it will say that your company must respond to them – and not the carrier within so many days.   If you do not, then you may have admitted that the debt is valid.

I am not a credit and collections expert.  I am only warning you to respond to any collection letters timely or you may end up owing a premium dispute debt.  Calling the collection agency is basically worthless as you have no documentation to back up anything you have told the collection agency.

We have had two companies call us where they did not respond to the collection agency’s letter.  The collection agencies are now saying they are in default of a debt and must pay it.  The main reason that this happened in both cases was the employers threw away the collection letters.

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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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