Workers’ Compensation Premium
Auditing Review Service
Business managers receiving the final premium billing for their workers’ compensation policy often ask themselves, “Since the insurer completed a thorough audit, how do I know whether these numbers are accurate?” Usually business managers pay the final billing after performing a perfunctory review of the premium auditor’s report.
Since the insurer’s premium auditors are professionals who review records to determine final premium, why should my company be concerned about the accuracy of the auditor’s report?
Premium audit reports often times contain errors and it may be as simple as arithmetic errors. Errors may also involve an auditor’s failing to understand the relationship between company operating entities, or your relationship with independent contractors or subcontractors, or your payroll accounting records. Sometimes the auditor simply draws the wrong conclusions while interpreting incomplete records. The premium audit process is not a precise science and errors frequently occur.
What information needs to be gathered and analyzed in order to complete a review of the premium audit report?
Insurer loss runs must be gathered and checked. Payroll records need to be gathered, sorted and summed by classification. Classification codes must be verified to make sure the correct codes are applied. Experience rating worksheets must be examined for bureau errors. Finally, all this information must be pulled together and compared against the premium audit report to either confirm accuracy or to uncover errors and calculate the dollars involved.
If an overpayment is discovered, might my company pay more for the premium audit review service than might be recovered from the insurer?
Your company only pays when KMA finds an error in your favor. Then, regardless of the amount of reimbursement that is recovered for your company, you only pay to KMA 50% of the dollars you successfully recover from your insurer. Where KMA finds errors in your favor, we will prepare a report which details the findings of our review of the premium audit. This report will provide sufficient documentation with which you can request credits or refunds from your workers’ compensation insurer.
Risk Management Audits
At any time in the evolution of your business KMA can perform valuable audits of your existing risk management and insurance program in the larger context of your overall use of techniques to manage your business’ exposure to the risk of loss. Some examples include: