Why is an audit required?
We requires audits to verify all remuneration paid during the policy period. This includes payroll and other forms
of compensation paid to employees, contractors, and subcontractors. The audit ensures your workers’
compensation premium is calculated accurately.
What happens if I do not allow the audit?
Failure to comply with the audit requirement will result in cancellation of your current policy.
Do I still need to complete the audit if I no longer need the policy?
Yes. Completing the audit is required even if coverage is no longer needed. Compliance is necessary to remain
eligible for future workers’ compensation coverage.
How are subcontractors handled?
You are responsible for monitoring subcontractors. If subcontractors do not carry their own workers’
compensation insurance,their payroll may be included in your audited payroll, which could result in additional
premium. To avoid this, please maintain valid workers’ compensation certificates of insurance for all
subcontractors. Refer to Part Five of your policy coverage form, Sections F and G, for additional details.
Are we required to allow access to business records?
Yes. State regulations and NCCI rules require policyholders to allow insurance carriers to review business and tax
records for audit purposes. Contracted audit firms have the same rights as the insurance carrier.
What business records are needed for the audit?
Records may include, but are not limited to: checkbooks, general ledgers, bank statements, payroll records,
receipts and invoices, certificates of insurance for subcontractors and contractors.
What tax records are needed for the audit?
Tax documentation may include: Federal tax returns (Forms 1040, 1065, Schedule C or 1120), quarterly and annual state and federal payroll reports (941's) and Form 990 for nonprofit organizations
When will the audit be conducted?
Our goal is to complete the audit within 90 days after the policy expiration date. However, state regulations allow
audits to occur during the policy period and up to three years after the policy ends (or longer if access is denied).