What Happens During an Audit
A Workers’ Compensation audit can be an overwhelming and stressful time, especially if you are worried about safety risks, previous injuries, or even losing the Workers Compensation coverage you need to protect your business and your employees. To cut down on the stress associated with audits, here are the details you need to know.
What is an Audit?
A Worker’s Compensation audit is a process carried out by insurance companies, with the goal of verifying the accuracy of premiums paid by employers for their Workers’ Compensation coverage. During this process, they’ll also determine if the paid premiums align with the exposure to risks, and if the business is accurately categorized based on the nature of the industry and the level of risks associated with that industry.
The Main Steps of an Audit
An audit has a few key steps:
- Your business receives a notification about the upcoming audit, giving you time to collect and organize any relevant records.
- The audit is conducted, either on-site or virtually. If an audit is on-site, it means someone will come to the physical location of your business to inspect the workplace and look at your important records.
- Your data will be reviewed and verified. During an audit, your auditor will look at details like payroll records, wage replacement documents, medical benefits, and employee classification. At this stage, your auditor will also look at your Workers’ Compensation coverage to make sure you’re offering coverage in compliance with all state, federal, and industry requirements.
- Once this has all been done, your auditor will use the gathered information to calculate your Workers’ Compensation premium.
What are the Consequences of Audit Issues?
If your auditor finds issues during your audit, like safety risks around the worksite or misclassified employees, it can lead to a variety of issues. One of the biggest consequences is a higher Workers’ Compensation premium. If your audit results in a raised premium, it can make it harder for your business to find the Workers’ Compensation coverage you need to protect your employees and your business. If you have a high premium, you might have limited coverage options, or need to strain your budget to find coverage that meets the unique needs of your business.
Other consequences that can arise during an audit include:
- Fines
- Penalties
- Liability issues
- An increased risk of workplace accidents
Finding Audit Support
At Work Comp Business Insurance Solutions, we’re ready to help your business navigate the challenges of Workers’ Compensation audits. We offer multiple products to help businesses find the assistance they need. This includes a Workers’ Compensation product with risk management and loss control services to minimize workplace hazards, prevent accidents, and help you find the coverage you need to protect your business and your employees.
At Work Comp Business Insurance Solutions, we help business owners find the best Workers’ Compensation and payroll solutions.
