Your business’ actual workers’ comp insurance premium is determined from the annual workers’ comp audit conducted by the insurance company. This insurance premium can vary drastically from the estimated insurance premium used to create the original policy. To expedite the process, assign one person as the sole contact for the auditor. This helps to eliminate miscommunication. Select someone that is intimately acquainted with all aspects of the business and employees, as well as the payroll records. Have info about the specific job duties performed by a certain department or by individual employees at hand. Anticipate all questions to gain an advantage and make sure that you can provide correct details to the auditor. You do not need the auditor to make any guesses because he or she will inevitably choose the workers’ comp codes that will definitely be more favorable to the workers’ comp insurance carrier. Ask for the work papers for the previous year’s audit for the contact person to review with your prior years audit billing statements. This will jog his or her recollection from the prior audit or show him the types of information the auditor is looking for). At any rate, it is a good preparation tool, sort of like preparing for a test. Ensure that your payroll information clearly specify which hours were paid as overtime so that he does not mistake that pay with straight hourly wages. If your company uses subcontractors or independent contractors, make sure you have proof that they have their own workers’ comp insurance. Without that evidence, your insurance premiums will likely go up, as you may be liable for their risk exposure. If you employ a employment agency, those workers are employed by that agency and is going to be covered under the agency’s workers’ comp policy. Make sure your records and clearly differentiate between employees, contracted temp employees, and independent contractors. If you are in the construction industry, or similar, don’t forget that you’ll use multiple workers’ comp class codes and assign one employee multiple job codes. Documentation must show the particular hours staff spent in each of the different workplace exposures. If not, every employee will be put into the most expensive classification code possible. The key is knowing how the insurance companies operate. Their ultimate goal is to raise your rates to as high as feasibly possible. The thing you need to understand is that they frequently make mistakes and you must be on the watch out for them. If you’re not fully prepared or you’re unfamilar with the workers compensation system, talk to a professional or start brushing up on your workers’ comp knowledge. It will likely mean the difference between saving and spending a lot of money.