Are Work Comp Premium Audits Only Correct 25% Of The Time?
We have analyzed enough data in our premium reviews to have a baseline number for the % of premium audits that we have found to be inaccurate.
I received an email the other day from a vendor that does or claims to do what we have been doing for many years. The company says that 75% of work comp premium audits are wrong. This seems to be an inflated number.
The 75% number is even high if one takes into account the very small inaccuracies that do occur in premium audits. Inflating percentages as a part of marketing or advertising possibly harms the industry as a whole.
I assume one could take a weaker position that a premium audit is inaccurate and count that in as an inaccuracy. We, as a company, have never done or will never espouse a weak position as a basis for a dispute.
Disputing an audit is a serious business. We often receive phone calls from employers that have disputed an audit with no basis. That is a great way to harm the relationship between your agent, carrier, and the insured employer.
We encourage employers to have some type of number on which to base a dispute. There are many areas where a premium audit can have mistakes. The first piece of advice we always give is – “Did something change in your business that would make you a higher risk?”
Changes in a business or rapid growth can cause an employer to experience a larger audit bill than expected overall. However, the best way to reduce Workers Comp premiums is to always question any bill or audit on receipt.