If you have Workers Compensation Insurance, you are likely familiar with a Work Comp Audit. A Workers Compensation Audit will verify a company’s payroll and business operation to make sure they are charging the correct amount of insurance premium.
Workers Compensation Insurance is based on a businesses payroll. Employee payroll can change from year to year. If a company’s payroll is less than the prior year, than that company is due a refund because they paid for more payroll than they actually had. If the payroll was more, the business will be sent a bill for the difference of the payroll amount they were charged.
The insurance company will also check to see if there are other operations being added from the previous year. Work Comp insurance is charged according to the type of work that a business is performing and the amount of payroll for that type of work. An example might be if a business was selling cabinets. Maybe after a year, the business decided to start installing cabinets. The installation of the cabinets would be a different business operation and would then be charged for the amount of payroll for the installation operation.
The Work Comp Audit will ask for payroll statements and sometimes business tax statements to verify employee payroll.
The insurance company will also ask if any subcontractors are used. If you have subcontractors working for your company, they are required to carry workers compensation insurance. If subcontractors do not have work comp insurance, than your business may be charged as if the subcontractor was an employee. If this is the case, your business will be charged for the entire payroll of this subcontractor as if they were an employee. The auditor will ask for the Sub Contractors Certificate of Insurance to verify they have the correct insurance coverage.
We work with the best work comp insurance companies. For a review or a quote of your workers compensation insurance, you can call or text 763-767-0522 or get started on the contact form listed below.