Worker Compensation Audits
When it comes to California Workers Comp Audits there is nothing more frustrating than when easily avoidable mistakes are made. This in turn causes the insured to have to pay costly premiums even after their policy period has expired. Some examples include incorrect annual payroll projections, lack of keeping accurate records and staying on top of payroll figures throughout the year, utilizing contractors or outside vendors who do not have workers compensation insurance themselves, and lastly not having an owner/manager in charge of working with the auditor who has a good understanding of how a California Workers Comp Audit is performed. I am going to go into a bit more of each of these to ensure you have the best possible understanding of how to avoid these mistakes when it comes to your audit. For more information please visit our Workers Compensation page, see link: California Workers Compensation Insurance
Incorrect payroll projections can be detrimental. The best advice that can be given is to take the time to report accurate figures AND class codes at the inception of the policy. Each employee’s job has a certain class code that the insurance companies use to determine the rate at which you will be charged. You may have several different class codes being utilized in one company. You must make sure each employee is classified correctly because if not you could be paying more than you should be. Or in another worse instances you may be paying less and when your California Workers Comp Audit comes around you will find yourself getting hit with a costly bill you were not expecting due to misclassification at the end of your policy term.
Keeping accurate records and staying on top of your projections for the year takes time but will ALWAYS pay off in the end. It is important to report all figures and class codes accurately in the beginning and if you are off a bit or things change as they often do, don’t worry! Your carrier will allow you to make adjustments at any time which would adjust your monthly payment based on updated figures and/or give you a chance to start putting some money away so you can start accruing for the additional premium you may be responsible for. That’s why it is vital to keep the best records possible so you will not have to be responsible for more premium than you should be.