When you own a business and are required to carry worker’s compensation coverage, you will need to comply with the annual payroll audit procedures set by your San Diego insurer every renewal period.
Worker’s compensation is a unique type of business insurance coverage with premiums based on the coverage provided for the prior year. During a payroll or annual premium audit, the auditor will review payroll records and estimated premiums to calculate whether or not the company will be surcharged on the future policy. Here are some ways that you can prevent being charged hundreds or thousands of dollars before, during and after your audit.
Auditors use all payroll information and public information to classify your company and audit payroll. It is important to be sure that information available on your company is accurate and not misleading in nature. Correct public information that can be misleading about the operations of your company online to prevent premium increases.
It is also very important to create a detailed job description for every title in the company. If your auditor is forced to make assumptions about the roles and responsibilities of employees, this could lead to an error that increases your premiums. You never want the auditor to result to the worst-case scenario because their questions were not answered.
Make sure that all of your payroll documentation is accessible during your audit. If you read the terms of your policy, you will find that auditors have the right to request you to furnish any type of document that can affect the computation of your premiums. If you refuse to provide a document, this could be a red flag leading to premium increases and policy cancellation.
There is nothing more inconvenient than going through the process of disputing additional premiums charged after a worker’s comp audit. To avoid this, prepare yourself ahead of time. Make sure you know the rules of your state, check your policy for errors, and stay involved in the process.
If you have recently experienced an increase in your insurance rates or premiums, or are in search of an affordable insurance company, contact American Tri-Star Auto Insurance today. Along with comprehensive auto insurance for San Diego drivers, we offer commercial and business insurance, helping businesses protect themselves against the alarming amount of risk they are faced with each day. Call 619-272-2100 to speak directly with a professional insurance representative.