WC Audit Process
IHOS and our stratigic parnters focus on the aviation industry gives us unparalleled insight into managing the audit process for you. While necessary to determine the final premium, we strive to make the experience as efficient and convenient as possible. IHOS and our stratigic parnters can manage and direct most audits inhouse.
Workers’ Compensation Audit Process
A workers’ compensation policy is issued based on the estimated exposure (payroll and job classification). The final premium is determined through the premium audit.
At the end of the policy term, an audit professional will reach out to the business owner to make arrangements for a review of operations, records, and books of account. Based on the outcome of the premium audit, an adjustment may be made resulting in either an increase or decrease to the paid premium.
Helpful Tips for a Smooth Audit Process
Be prepared. The auditor will need access to records. These records may include payroll reports, overtime earnings, 941s, state unemployment reports, general ledgers and certificates of insurance if subcontractors were used. Compile the applicable financial records and put together a complete and organized audit file prior to the visit.
Designate a knowledgeable staff member to work with the auditor. Choose a representative who is familiar with the financial records and the daily operations of the business. Workers’ compensation policies are based on assigning employees a proper classification. It is imperative that the insured’s audit contact is knowledgeable on the specific job duties of employees and that contact can assist the auditor with any questions.
Feel free to ask questions during the audit. Ask the auditor to clarify anything not understood.
Conduct a final review with the auditor. At the conclusion of the audit, review the auditor’s findings. A company representative and the auditor should recap the audit result s to ensure that they are accurate.
The Importance of a Workers’ Compensation Premium Audit
The premium audit serves a very important function. Not only does it determine the final premium for an insurance policy, but the data collected at audit (payrolls, class codes and claims data) is later submitted to rating organizations (NCCI and independent bureaus) to be used in developing experience modifiers and loss costs. It is paramount that the premium audit is accurate, verified, and in compliance with mandated rules and regulations.