What Is The Workers Compensation Insurance Audits? 2022

Hey guys, I sid today I will discuss with you- What is the workers compensation insurance audit? 2022 Well.

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  • In this video we’re going to tell you exactly what it is,we’re gonna explore why it’s important for you,and then we’re gonna give you some tips and tricks to make sure you’re ready for your next audit.
  • And in the following section, we’ll examine all of that. (reverberating logo) (rocks crash) Hello everyone, this is Jack Wingate on this channel.
  • We assist people, families, and organisations in lowering their insurance costs, assisting you in better comprehending insurance, and keeping you informed of developments in the insurance sector.
  • So Additionally, we’ll examine the audit of workers’ compensation insurance in this video.
  • The audit is complex for most business owners, or it appears to be complex.

Some Tips of Audit

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And sometimes it can be over whelming.So today we’re gonna look at what it is,we’re gonna discuss why it’s important,and if you’ll stick around ’till the end,we’re gonna give you some tips and tricks to make sure you can comply with your next audit.Okay, so. 

What is the workers compensation insurance audit?Well, workers’ compensation,like some other commercial lines of business, is auditable.That means that when you start your policy period,you’re starting with basically an estimate because the workers’ compensation policy is based on or rated on your actual payroll.

And even if a business has been around forever,it is nearly impossible for you to pinpoint exactly what your payroll is going tobe for the upcoming 12 months. There’s just too many variables.

There’s pay raises, there are hirings and firings,people retiring. So the workers’ compensation audit is simply a way for the carrier to look back at your last policy period and get the exact amount of payroll that you had.

Why compensation audit is Important ?

Now that we know what the workers’ compensation audit is, why is it important? Well, workers’ compensation is crucial coverage for most every business, as well as the employees or workers that you have. So instead of you having to worry about notifying your carrier or your agent every single time you adjust payroll, every single time you hire and fire.

the carriers came up with a way that you can use an estimate of payroll for the upcoming 12 months,and then at the end of it you settle up.If you overestimated your payroll, then at the end of the year the insurance carrier’s gonna go in and send you a checkback for the difference.Likewise.


If you underestimated your payroll,at the end of your policy period you’re gonna have to write a check to the insurance carrier for a little bit of money,whatever the difference is.

Now there are some carriers not that use a pay-as-you-go or reporting form style of workers’ compensation auditing,which is basically auditing yourself as you go.So every month you would complete a worksheet,send it to the agent,send it to the carrier,that spelled out the payroll for that month.Some businesses love this.

Some seasonal businesses this is really good for when it comes to payroll and cash flow.But it’s not for everyone and not every carrier offers it.So making sure that you’re able to use an estimate up front and that you can settle up with the insurance carrier at the end saves you aload of time and worry over the policy period.

Business owners approach

  • We need to discuss compliance with your audit now that we are aware of what a workers’ compensation audit is and why it is crucial. Now, some people might not give a damn about following their audit and believe there won’t be any consequences. In fact, after going out of business, I’ve had companies and business owners approach me and say, “Well, there’s no need for me to even worry about this; why should I worry about it?” No longer do I require workers’ compensation insurance.
  • The truth is that each state has the authority to add a multiplier to the amount of your expected payroll or to permit the insurance companies to do so.
  • The law in North Carolina stipulates that the carrier may charge you up to 200 percent more than what you initially anticipated.


So that could come into big amounts of money if you’re not in compliance .And yes, they will turn you over to collections,so you have that whole nightmare to work with.It’s best just to make sure that you’re in compliance regardless of whether you’re gonna continue our business or not.

So let’s talk about the real reason that you’ve stuck around all the way to this point in time,and that is for the tips and tricks to make sure you can stay incompliance with your audit.

First things first, let’s talk about What Is The Workers Compensation Insurance Audits? 2022 the documents that you’re gonna need when it’s time for your audit.And yes, it’s gonna take a little leg work on your part.If you’ve got a bookkeeper, great,but most small business owners don’t really have that and they’re doing everything themselves.