Why this review matters
Workers’ compensation premiums are often based on estimated payroll and operations, then reconciled through an audit. Organized records help the business explain what changed and reduce avoidable classification or documentation problems.
Information to prepare
- Payroll summaries for the policy period
- Employee duties, locations, and class-code assignments
- Overtime detail where the applicable rules permit separation
- Certificates and payment records for subcontractors
- Ownership, officer, and entity information
Decisions to discuss
- Whether employee duties changed during the year
- How multi-state or remote work is tracked
- Whether subcontractor documentation is complete
- Which changes should be reported before the next renewal
Common pitfalls
- Classifying employees only by job title
- Missing certificates for subcontractors
- Waiting until the audit to report a major operational change
- Mixing payroll periods or entities without explanation
Frequently asked questions
Why does a workers’ compensation audit occur?
The audit compares estimated exposure with actual payroll, classifications, and operations during the policy period so premium can be reconciled under the policy terms.
Do subcontractor records matter?
Yes. Incomplete certificates or records can affect how subcontracted work is treated. Requirements vary, so the auditor or insurance professional should clarify what is needed.
Coverage descriptions are general. Availability, eligibility, limits, exclusions, and policy terms vary. Review actual policy documents and requirements with an appropriate insurance professional.