Workers Comp Audit Guide
Workers comp audits confuse contractors. Learn what to expect, how to prepare, common audit mistakes, and how to avoid surprise bills in AL, GA, TN.
Workers Comp Audit Guide
Workers comp audits confuse contractors. Learn what to expect, how to prepare, common audit mistakes, and how to avoid surprise bills in AL, GA, TN.
In this article, Todd Conn, CLCS, founder of TCDS Insurance Agency, shares his insights on Workers Comp Audit Guide | Contractors. As a 2023 Agency of the Year recipient with a 4.9-star rating, TCDS is committed to educating consumers on making informed insurance decisions.
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What is a workers compensation audit?
A workers comp audit is an annual review by your insurance company to verify that the payroll and job classifications reported on your policy match your actual operations. The audit determines whether you owe additional premium or are entitled to a refund based on your actual payroll figures.
How do I prepare for a workers comp audit?
Gather your payroll records, tax returns (940 and 941 forms), certificates of insurance from subcontractors, overtime records, and a list of all employees with their job duties. Organize these documents before the auditor arrives to ensure a smooth and accurate audit process.
Can a workers comp audit result in a refund?
Yes, if your actual payroll was lower than estimated, or if employees were reclassified into lower-risk categories, you may receive a refund. Conversely, if payroll was higher than estimated or employees performed higher-risk duties, you may owe additional premium.
What happens if I disagree with my audit results?
You have the right to dispute audit findings. Start by reviewing the audit worksheet for errors in payroll figures or job classifications. Contact your insurance agent to help negotiate corrections. If unresolved, you can file a formal dispute with your carrier or the Alabama Department of Insurance.