Your company's workers comp premium audit records may need to be at your fingertips for a few years. Why? Let's look at what happened from March 2020 to now.
Hybrid Premium Audits Will Be Temporary Situation
Most of our clients had received Zoom workers comp premium audits over the last 1 + years. These hybrid audits were considered not the best by the insurance industry for many years. There is nothing wrong with those types of audits.
Most rating bureaus and state WC Commissions waived the in-person physical audits due to COVID-19. The insurance carriers were left to either request physical records and audit those and/or doing a video audit meeting with their insureds.
Old Workers Comp Premium Audit Records and Physical Audits
Soon, the physical audit waivers will cease. The physical premium audit requirement will be back in place. As you may already know, insurance carriers can review records up to three years old including prior policy, classification code, and payroll information. If you do not believe the three-year prior review period, look in your policy. Yes, it is in there. California would be one of the main exceptions to this policy provision.
I always recommend taking a few minutes and reading your policies including Workers Comp and General Liability. Go old school and print them out.
I am not saying that any carrier would be up to hijinks by requesting records for prior policy years while they are auditing your policy that just expired in the last few months. The premium auditor is already on-site reviewing the current year. Hopefully, the premium auditor would notify an employer by letter if they want to review a previous hybrid or Zoom audit of past policy years while they are there for the just-expired policy.
Take my advice and keep the workers comp premium audit records from prior years where you can locate them more easily. Old records can sometimes be hard to locate on short notice.
This blog post is provided by James Moore, AIC, MBA, ChFC, ARM, and is republished with permission from J&L Risk Management Consultants. Visit the full website
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