Wednesday, April 22, 2015

Work Comp Audit Tips

The workers compensation audit process is extremely important. At the beginning of the policy period you estimate your payroll in order for the company to provide an estimated premium for the year. This number is an educated guess because you have no way to foresee your business’s actual payroll until the completion of the year. This is why your Lake of the Ozarks insurance carrier will perform a work comp audit on your payrolls after the conclusion of the policy period. In some cases the business will do a reporting form throughout the year; however many businesses are only subject to an annual audit.

Keeping Payroll Seperate 

In order to avoid the pitfalls of a work comp audit you should be prepared well in advance for the process. One of the most important parts of the process is keeping your payroll separated when possible. If you have an employee that is doing multiple job duties your records should identify the workplace exposures and separate the payrolls by class. If your payroll records do not reflect this then the auditor will likely pool the entire payroll under the highest rated class description for that employee.


You should also have all certificates of insurance available from all 1099 subcontractors. If you do not show that the subcontractor carries his own coverage by providing documentation in the form of a certificate, you will be charged for the exposure of the subcontractor that is working on your behalf. All documentation should be readily available for when the auditor arrives.

Review the Audit

Provide the auditor with the payroll records they require and a comfortable area in which to work.  When they have completed the audit, ask them to supply you a copy of their worksheets. Be sure to review the worksheet and the audit bill once your receive these and be sure to compare the payroll classes on the policy verses the audit payroll classes. Review the rates for the class codes, the experience modification factor and any schedule credit as there should not be any changes from the policy. Also, be sure to check the math to make sure everything pencils out correctly. Even auditors can make mistakes.

Finally, be sure to contact the auditor to discuss any discrepancies or to answer any questions you may have. For any questions regarding workers compenstation at the Lake of the Ozarks, contact Insure the Lake at 573-348-2794.

Contact Insure the Lake today for all your Lake of the Ozarks business insurance needs! 

About the Author: Steve is a double back-flip insurance ninja. He was named Young Insurance Agent of the Year by the Missouri Association of Insurance Agents in 2010 and is a Certified Insurance Counselor. When he is not helping customers, he enjoys community service, Latin dancing with his beautiful wife and going on adventures with his two awesome sons.

Steve Naught, CIC

3736 Osage Beach Parkway
Osage Beach, MO 65065
Next to Golden Coral

T: 573-348-2794
F: 573-348-0191