Workers compensation premiums start with an estimate of your payroll. After the policy year ends, the carrier audits your actual payroll and job classifications. If payroll was higher than estimated, you owe additional premium. If it was lower, you may get money back. Good records make the audit quick and fair.
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What records will the auditor ask for?
Expect requests for payroll reports, quarterly tax forms, a general ledger, and certificates of insurance for any subcontractors you paid.
Payments to subcontractors without their own coverage can be added to your payroll for premium purposes.
How can I avoid a surprise audit bill?
Update your broker if your payroll grows or you add new types of work during the year. Adjusting the estimate mid-term spreads the cost instead of leaving a large bill at audit.
Collect certificates of insurance from every subcontractor before they start work.
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What if I disagree with the audit?
Review the audit worksheet carefully, especially job classifications. Misclassification is a common reason for higher premiums.
We can help you review the results and request corrections with documentation.
Frequently Asked Questions
Are workers comp audits mandatory?
Most workers comp policies include an audit condition, and refusing an audit can cause penalties or cancellation.
Does overtime count in payroll?
Rules on overtime vary by state and rating system. Ask your broker how it is treated.
Can I get a refund after an audit?
Yes. If actual payroll was lower than estimated, you may receive a return premium.
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Request a quote online or call our Sunrise office. Insurance Risk Advisors has served South Florida for more than 35 years.
