A worker’s comp insurance audit is a review of your company’s records to ensure that you comply with the terms of your insurance policy. Understanding the process and what is expected of you is essential to provide all necessary information that is accurate and up-to-date. This blog post will cover what an insurance audit entails, how to prepare for it, what information is requested in an audit, and the penalties associated with non-compliance.
What Does An Insurance Audit Entail for A Business Owner
For business owners preparing for their first worker’s compensation insurance audit, there are several things to consider before submitting paperwork to the auditor. It would be best if you were designed to provide detailed records on employee payroll, job classifications, and job descriptions.
You should also provide documentation on any changes in ownership structure since the initial policy was purchased and records on any injuries or claims reported during that period. You may also be asked to provide evidence of employee safety programs or other training courses during that time.
How Do I Prepare for My Audit
The best way to prepare for a workers comp insurance auditing is to gather all relevant documents long before it takes place. Assemble pay stubs, other payroll information, job descriptions, and safety program records.
Ensure all documents are organized into folders according to type, for example, payroll records and job descriptions, so the auditor can easily access them when needed. Additionally, it’s essential to stay organized throughout the entire process so that nothing gets lost or misplaced while waiting for the final assessment from the auditor.
What Information Is Requested in The Audit
During a worker’s comp insurance auditing process, many different types of information will be requested from you, including employee payroll details, Employer’s Quarterly Federal Tax Return, Form 941 or 943 reports, State Employer’s Quarterly Unemployment Insurance Tax Reports, Federal 1099, W2, and W3 transmittals, Overtime wages summarized by classification, List of clerical employees and duties, Contractor or subcontractor records.
What Are The Penalties For Non-Compliance
Non-compliance with workers comp insurance audits can lead to hefty fines from state agencies and private insurers, depending on what was found during the audit process. Additionally, if fraudulent activity has been proven, criminal charges could potentially come into play depending upon circumstances surrounding the non-compliance issue.
How Long Does The Audit Process Take
The time required for a worker’s comp insurance auditing process varies based on several factors, including the size or scope of operation being reviewed and the amount or type of documentation needed throughout proceedings. Generally, most audits are completed within 90 days of your policy expiration.
What To Expect in An Insurance Auditing – In Conclusion
Preparing yourself for a worker’s comp insurance auditing makes it easier when it comes time for review by an outside auditor appointed by the insurer. By having all relevant documents ready prior, businesses can increase their chances of success while reducing stress associated with proceedings. Understanding what types of information will be requested also helps create a smooth transition between phases, thus allowing the company owners to focus more on other aspects of business operations instead of spending too much energy worrying about potential fines due to a lack of proper preparation during the pre-audit stage.
