Workers’ Comp audits are unavoidable. When you obtain a Workers’ Comp policy, the premium is determined using your estimated annual payrolls and classification codes based on your operations. At the end of your policy period, an audit is completed to determine your actual premium. This may result in either an additional premium due, or a credit. Knowing how to prepare for a Workers’ Comp audit will assist you in avoiding issues with the audit process, as well as potentially lower any additional premium owed at the end of a policy period. We can help you with the process of preparing for a Workers’ Comp audit.

Preparing for a Workers’ Comp audit can be a daunting process, but knowing what the auditor needs will help streamline the process. The following information is generally needed by an auditor in order to determine your actual exposures for the policy period:

• A detailed description of your business operations — this will help the auditor determine if your policy is properly classified based on your actual operations.

• Payroll records that cover the policy period, including: Payroll journal and summary, Federal Tax reports (941’s that cover the audit period), State Unemployment reports (NYS-45’s) and individual earning records, and all overtime payments shown individually.

• Employee Records including a detailed job description for each employee — this will allow the auditor to include each employee’s payrolls in the proper class code for their job duties.

• Cash Disbursements showing: Payments to any subcontractors, materials, and casual labor

• Certificates of Insurance for all subcontractors and/or independent contractors — any subcontractors that do not carry Workers’ Comp insurance and are required to ) will be automatically included on your Workers’ Comp audit. Providing the auditor with certificates of insurance showing proof of Workers’ Compensation coverage will avoid these contractors from being included in your Workers’ Comp audit charges.

Preparing for a Workers’ Comp Audit: We Can Help