Workers Comp Audit Stress Reducer
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Premium audit

The Workers Comp premium audit usually occurs within 60 days after policy expiration. The audit usually involves an in-person physical audit by a premium auditor that works for the carrier. Audits are subject to high error rates. The employer can initiate a premium dispute if they disagree with their premium audit result.

The process usually involves these steps:

  1. Your Workers Comp insurance carrier issues a policy procured by your agent.
  2. Your policy expiry occurs in 12 months.
  3. The Workers Comp premium auditor sends a letter or email asking you to provide certain information for the physical in-person audit.  This has been altered due to the pandemic where the auditor may ask your company to send them information.  They may not plan to show up at your offices.
  4. The worker’s comp premium audit occurs whether in person or with a hybrid audit due to the pandemic.
  5. Your company receives a premium audit bill or statement. The audit results may or may not be attached.
  6. Within 10 days, your company is asked to pay the final policy bill due to the worker’s comp premium audit.
  7. If your company wishes to dispute the results, you must provide a written dispute with supporting information on why you disagree with the audit.  The insurance carrier usually requires the dispute information with 10 days, which may not seem feasible due to the time constraint.

The audit process remains one of the reasons that employers contact us the most often.  Many times, the employers do not understand the process.

Carriers and agents sometimes do not entirely explain the process to an employer unless the insured client has disputed the audit.

One of the most disputed items is that after the insured receives their premium audit bill, another policy period has already begun with the same worker’s comp insurance carrier.

The employer will pay a stiff fee known as a short rate penalty if they jump to another carrier during the policy period.

Many times, the insurance carrier will forward their overdue bill to an attorney for collection through the courts even when a valid dispute has been launched by the insured employer.

The premium audit process is one of the most controversial topics with employers, carriers, and premium auditors.



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