What Should I Do if My Workers’ Compensation Coverage is Being Audited?
As an employer, it’s important to understand all aspects of Workers’ Compensation insurance, including audits. So, what is a Workers’ Compensation audit, and what should you do if your coverage is being audited?
During a Workers’ Compensation insurance audit, there are several steps employers can take to simplify the process. Start by reviewing your policy and familiarizing yourself with current rates and payroll numbers. Then, compile the necessary information your carrier needs to conduct an audit. Once an audit is complete, review its findings and see if they align with your company’s needs. If they don’t, you can ask your carrier to review its decision or find other coverage. To avoid this arduous process, consider purchasing pay-as-you-go coverage which bases Workers’ Compensation insurance premiums on current information, not annual estimates.
At NPN Brokers, we’re here to help companies get the Workers’ Compensation insurance they need, stress-free. To learn more about the Workers’ Compensation insurance brokers at NPN Brokers, call today at (866) 340-9120.
What to Do During a Workers’ Compensation Insurance Audit
Workers’ Compensation insurance audits can be taxing and lengthy experiences for employers. Preventing errors and unfavorable outcomes is crucial, as some insurance carriers might use an audit as an opportunity to increase employers’ Workers’ Compensation insurance premiums for the coming year. Our small business Workers’ Compensation insurance brokers can help you learn how to prepare for audits and what an audit might mean for your company’s future premiums.
Review Your Policy
When a carrier informs you of an impending Workers’ Compensation audit, it’s important to prepare. If audits are part of your carrier’s practices, there’s not much you can do to avoid them. However, you can take certain steps to make the process easier.
The first thing you should do when preparing for a Workers’ Compensation insurance audit is review your policy. It’s important to be informed. Know your current premiums and the extent of your coverage. Understanding Workers’ Compensation insurance policies and their limitations can be challenging, especially for busy employers with many responsibilities. When you partner with our Workers’ Compensation insurance brokers, we can take you through your policy step by step so that you thoroughly understand your plan.
Simple errors regarding payroll estimations and worker responsibilities can make a Workers’ Compensation insurance audit’s outcome less favorable for employers. Be sure to compile the necessary information as soon as a carrier informs you of an upcoming audit. You may need records of last year’s payroll, operations, and other information. Preparation and organization can be crucial when facing a Workers’ Compensation coverage audit.
Review Audit Findings
Once an audit is complete, it’s time to review its findings. Some insurance companies might use jargon and phrasing that’s unfamiliar to employers. Understanding the language used in an audit’s findings and what it may mean is crucial to properly assess an audit’s outcome. Depending on the circumstances, an insurance carrier might determine that you’ve paid too much for the previous year, haven’t paid enough for the previous year, or need to pay more in premiums for the upcoming year. Take your time reviewing a Workers’ Compensation audit’s findings so that you can make the best decisions for your company in the future.
What Can You Do if a Workers’ Compensation Insurance Audit is Unfavorable?
If a Workers’ Compensation insurance audit is unfavorable, employers have few options for how to proceed. They can choose to appeal a decision, provide additional information, and hope that an insurance carrier changes its decision regarding the cost of premiums. Or, an employer can find other coverage that might better suit their company’s needs.
Unfortunately, Workers’ Compensation coverage audits are not always favorable for employers. If risk factors increase or other changes occur during the year, an insurance carrier might choose to increase your company’s Workers’ Compensation insurance premiums for the upcoming year. Suppose this happened because you did not initially provide sufficient details regarding payroll and workers’ responsibilities. In that case, you might be able to overturn a carrier’s decision by giving the necessary information. However, there’s no guarantee an audit’s findings will change.
Another route employers can take after an unfavorable Workers’ Compensation audit is finding other coverage. Instead of renewing your coverage with a previous carrier, you can partner with our Workers’ Compensation insurance brokers to find a better policy at a more comfortable rate.
What Can You Do to Avoid Workers’ Compensation Coverage Audits?
For many Workers’ Compensation insurance carriers, audits are used to reevaluate coverage premiums and policies. The audit process can be lengthy and complicated for employers. It might be largely based on broad approximations that don’t accurately reflect a company’s risk factors. Consider choosing a pay-as-you-go plan to avoid unnecessary annual Workers’ Compensation coverage audits.
There is an alternative to lengthy Workers’ Compensation insurance audits. Instead of assessing premiums on an annual or biannual basis, this process can be done on a smaller level monthly. Companies can avoid cumbersome audits when they get pay-as-you-go policies from our Workers’ Compensation insurance brokers.
Unlike other policies, pay-as-you-go policies determine premiums based on updated information. You can send your company’s payroll information and other necessary records each month to your Workers’ Compensation insurance carrier. Then, premiums can change, reflecting the number of workers you actually employ. Instead of determining premiums based on broad estimates, pay-as-you-go coverage is streamlined for administrative purposes, making the monthly review of premiums more simple, accurate, and efficient.
If yearly Workers’ Compensation insurance audits are taxing and expensive for your business, know that another option exists. A pay-as-you-go plan can help you save on stress and money while protecting your company and employees in the event of a workplace injury.
Call Our Brokers and Get Workers’ Compensation Coverage Today
If you need Workers’ Compensation insurance, our brokers can help. To learn more about the Workers’ Compensation insurance brokers at NPN Brokers, call today at (866) 340-9120.
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