Workers’ Compensation Audits

When it comes to workers’ compensation in MA and your clients, make sure that they know everything about audits.

There’s nothing more annoying than your client having to pay an additional fee after a policy year has been expired. There are a number of reasons why this happens and they all have to do with the workers’ compensation in MA and the audit process.

1) The projection of payroll for the new year was incorrect

2) No one paid any attention to the projections to make sure they were correct

3) The insured did not understand the impact of using contractors without proper workers’ compensation in MA in their business

4) When the auditor arrived to perform the audit, the insured did not have someone working with the auditor that fully understood the policy audit process.

Let’s examine all of these points, so your clients do not have the same frustrations.

  1. Make sure that the projected payroll for all workers’ compensation class codes is correct. Companies with highly rated workers’ compensation in MA get hit the hardest because the rates have such a heavy influence on premiums.
  2. The insurance agent can easily provide this service by setting up quarterly diaries and then contacting the client to see what their actual payroll is year to date. This gives the client time to make adjustments to their workers’ compensation premium payment.
  3. If you choose to do work with a contractor and you do not provide them with insurance, the auditor may fine you. For example, if a contractor worked on your roof the auditor may ask you to provide proof of insurance for this job. If there isn’t any record, the auditor may simply add the roofer’s compensation to your audit.
  4. Employees need to be put in their proper class so that they can be properly audited. If they are not classified properly, the auditor may make payroll estimates based on incorrect assumptions. This will only negatively affect your company, because if they guess a higher payroll, the premiums will be substantially higher and it will be more money out of your clients’ pocket initially, and if they guess low, your client will be hit with a nasty fee after the policy year expires.

We’re experts on small business insurance and workers’ compensation in MA and can help you put the proper policies in place. To learn more about getting competitive coverage for your small business clients, contact us today.

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