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What Is a Workers Compensation Insurance Audit?

workers comp premium

The price of your Workers Comp Audit reflects the total payroll and type of work performed. You can find a list of what should be included or excluded from the payroll here. Just follow our step-by-step instructions to complete the audit yourself, at your convenience. Self-audits can be submitted online — the fastest, easiest way to complete an audit — or mailed to Pinnacol. A broker recommended we check our workers’ comp mods & premiums. Apex recovered $146,950 for us and we keep all future savings.

What happens if someone fails an audit?

For most people who fail an audit, the result is a bigger tax bill. Not only will you owe more taxes than you thought — you'll also owe interest on those taxes. This can make the bill quite high, but remember: You definitely won't get sent to prison for being unable to pay your additional taxes.

Workers’ comp carriers base your premiums on your number and cost of any previous claims, your industry and your payroll. The insurer’s auditor will be looking to see if you either owe or are owed money. You may have underestimated your payroll or incorrectly classified employees, or you may have overpaid due to similar classification errors. If your company deals with independent contractors and subcontractors, obtain their certificates of insurance and present them at the audit. Failing to do so will cause your company to be charged for their workers compensation premium as well. Payroll separation means you can divide employees’ wages across different class codes based on their various job duties.

Getting the Results of a Workers’ Comp Audit

Workers’ comp is a government-mandated program that ensures workers who injure themselves or become ill on the job receive certain benefits. These benefits lighten the load of being off-work and can include the replacement of wages. Check Experience modification worksheets if applicable.Often referred to as XMods, an experience modification is a rating related to workplace injury claims that you have filed in the past. This rating impacts the rate and premium you pay on your current policy. Some material covers the offering of the ADP Pay-by-Pay Premium Payment Program. All insurance products will be offered and sold only through Automatic Data Processing Insurance Agency, Inc., its licensed agents or its licensed insurance partners.

workers’ compensation insurance

Let our Instaquote do all the work, we don’t need much information and it takes 2 minutes. You’ll typically receive an audit summary from your insurance company explaining what the audit found and how your insurance premium will change. Certificates of insurance for any subcontractors who have worked for you over the last year. If the subcontractors do not have workers’ comp, they’ll be included as part of your payroll.

How to Survive a Worker’s Comp Audit

The key to a workers’ comp audit is preparation and having your paperwork in order, so you can produce the required documents swiftly. We’ve prepared the following seven ways to prepare for an audit, and if you follow this advice it can save you stress and perhaps money. At the same time, workers’ compensation coverage protects employers from employee lawsuits. An employee may take legal action when an employer fails to implement the proper safety measures in the workplace. Thus, the employee sustained injuries due to negligence on the employer’s part.

  • You’ll want to make sure your payroll estimates are as precise as possible.
  • Your insurance premium also depends on job classifications.
  • If you don’t have certificates of insurance and support documentation, your insurer may charge an additional premium for their coverage—and you won’t want that.
  • A Final Audit Statement is sent to you after the audit is complete.
  • During the workers’ comp audit, your provider adjusts your premium if your company now looks different.
  • If the subcontractors do not have workers’ comp, they’ll be included as part of your payroll.

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