For many small business owners, workers’ compensation insurance can seem like yet another bureaucratic hassle to deal with. Between estimating payroll costs and dealing with any claims that may arise, keeping your policy in good standing takes time and effort.
One part of having workers comp insurance that causes particular dread is the annual audit, where your insurance provider reviews payroll records to calculate actual premium costs. However, with some planning, the audit process doesn’t need to be overly stressful.
Here are some tips to help make your next insurance audits for workers comp smooth sailing. Continue reading the article below to learn more.
Preparing for the Insurance Audits for Workers Comp Process
One of the most important steps you can take is to stay organized throughout the year. Keep detailed records of payroll amounts for each employee, categorizing them by the job classification or job duties listed on your policy.
Things like 941 tax forms, state unemployment reports, and documentation of overtime hours worked all need to be readily available. Be sure contractor records are also in order in case any subcontractors are included in your policy.
Having these documents compiled and easy to provide for the audit will save you time later. It also removes the chance an auditor will need to request additional documentation, which can extend the process.
Responding Promptly and Completely
When the notice your annual audit is due arrives, don’t delay in responding. Your insurance provider has a timeframe to complete the review, so promptly sending over all requested materials keeps things moving along.
Be thorough and ensure you’ve included everything listed to minimize back-and-forth requests. Opting for an online or remote audit if those are options can further streamline the back-and-forth.
Most of all, remain communicative. If you’ve missed a deadline or run into issues sending records, let your auditor know right away to avoid potential penalties.
Preparing for Adjustments
While you’ll aim to provide accurate payroll estimates upfront, some adjustments are inevitable each audit. Have a plan for how to address potential increased premium quotes. Budgeting a buffer let’s smaller adjustments be absorbed without delaying payments.
Larger bills may require setting up a payment plan. Responding professionally and promptly to audit results, even disagreements, shows your insurance provider you’re a low-risk client worth keeping.
Understanding premium adjustments are part of standard business practices that prevent unwanted premium hikes or policy cancellations down the line.
Insurance Audits for Workers Comp – Making it Simple
Taking a proactive approach to your annual workers comp insurance audit makes the process low-stress. Staying organized throughout the year with detailed payroll records eliminates last-minute scrambling. Communicating openly with your provider about your audit keeps it progressing on time.
Most importantly, accepting audit results and addressing any adjustments gracefully maintains a positive relationship for continued affordable insurance in the future. Keeping these best practices top of mind makes the insurance audits for workers comp procedures a simple part of responsible business operations.
