Tips to Avoid Costly Mistakes and Save Big on Your Work Comp Audit
Work comp audits are crucial to ensuring accurate insurance coverage and premium calculations for your business. By avoiding common mistakes during the audit process, you can not only save valuable time but also potentially reduce your insurance costs. Here are some essential tips to help you navigate your work comp audit smoothly and maximize your savings:
Maintain Accurate Records: Keep detailed and up-to-date records of your payroll, job classifications, and employee information. This will ensure that your audit reflects the most accurate and current data, preventing potential overcharges.
Classify Employees Correctly: It's important to talk with your insurance agent to ensure that your employees are classified correctly based on their job duties and responsibilities. Accurate classification is crucial because it determines the appropriate workers' compensation rates. Misclassifying employees can result in incorrect premium calculations and potentially cost you thousands of dollars. Recently, I spoke with a potential client who is a plumbing contractor about their workers' compensation policy. I noticed that while they had office employees, their policy only included a class code for plumbing. Office employees are classified at a lower rate compared to field workers who perform physical labor. As a result, they have been overpaying for years without realizing it.
Review and Verify Audit Findings: Carefully review the audit findings provided by your insurance auditor. Verify that the reported payroll and job classifications match your records. If you find any discrepancies or have concerns, address them promptly with your insurance agent. Your agent can reach out to the insurance carrier to have the audit reopened for corrections. It's important not to wait too long—ensure you get the audit reopened as soon as possible.
Work with an Experienced Insurance Agent: Partner with an experienced insurance agent who understands your industry and can help you navigate the complexities of work comp audits. They can provide expert guidance, review your policies, and assist you in optimizing your insurance coverage and reducing costs.
By following these tips and being proactive throughout the work comp audit process, you can avoid common mistakes and save money on your insurance premiums. Remember, a well-executed audit ensures accurate premium calculations, protects your business, and promotes a strong foundation for your insurance coverage.
If you need more information about the audit process or would like me to review your policies, please get in touch with me Bret@bgagencyins.com
