Your company's actual workmans comp premium is based on the annual
workmans comp audit conducted by the carrier. Your premium can vary drastically from the estimated premium used to create the original policy.
To streamline the process, assign one person as the sole contact for the audit. This helps to eliminate miscommunication. Choose someone who is closely acquainted with all departments and staff, as well as the payroll records.
Have information about the specific job requirements performed by a certain department or by individual employees handy.
Try to anticipate all inquiries to gain an advantage and make sure that you can offer accurate information to the auditor. You do not need the auditor to make any assumptions because he or she will always choose the workmans comp codes that will likely be more favorable to the workmans comp insurance company.
Ask for the work papers for the prior year's audit for the contact person to check with your prior years audit billing statements. This can jog their recollection from the prior audit or show him or her the sorts of infothings the auditor is looking for). Either way, it is a great preparation tool, sort of like preparing for a test.
Ensure that your payroll records clearly designate which hours were paid as overtime so that he does not confuse that pay with straight hourly salary. If your company uses sub-contractors or independent contractors, ensure you have explanation that the contractor have their own workmans comp insurance. Without that evidence, your premiums will likely go up, as you may be responsible for their added risk exposure.
If you use a temp agency, those workers are employed by that agency and is going to be covered under the agency's workmans comp policy. Ensure your records and clearly differentiate between workers, contracted temp workers, and independent contractors.
If you are in the construction industry, or similar, remember that you'll use multiple workmans comp job codes and assign one worker multiple classification codes. Paperwork must show the actual hours employees spent in each of the different workplace exposures. Otherwise, every worker will be put into the most expensive classification code possible.
The key is understanding how the insurance companies operate. Their goal is to charge you as much as possible with out losing your business. The thing you need to understand is that the insurance companies frequently make mistakes and you have to be on the watch out for them.
If you are not fully prepared or you're unfamilar with the system, seek out the advice of a professional or start brushing up on your workmans comp knowledge. It will likely mean the difference between spending and saving a lot of money.
