Norm Goodman here today with more about payroll premium audits … we are discussing what to look for during a payroll premium audit. The audit is the final statement that adjusts premium to actual payroll. Remember, an insurance policy is a contract between your company and the insurance company, and the only way it can be changed is by an “Endorsement.” It may not be changed during the audit.
During the audit ask: Have any changes been made except payroll? This seems like almost too basic to be mentioned, but you would be amazed at the number of audits that add or delete a class code, apply a changed rate to a class code, use a wrong “ex mod” (experience modifier), reduce discounts from those on the policy, or increase a surcharge. It shouldn’t happen, but it does.
Bear in mind that the only adjustment allowed on the audit is payroll; any other change that the auditor might deem necessary, must be done by endorsement — and agreed to by both parties.
When I perform payroll audits, I find all sorts of things that have been changed — but shouldn’t have… So, ask your broker whether anything was changed during the payroll premium audit. It is called a “payroll premium audit” because that’s what they are suppose to be auditing — the payroll!
Hope this was helpful. You’ll find another question to ask your broker in the next entry. Sign up for the RSS feed in top right hand corner of blog to get our blog entries hot off the press. Write me below, so everyone can read my reply or at [email protected]
