WorldWide Drilling Resource

last month, we talked about controlling workers’ com- pensation (comp) losses and claims. It is also important to be prepared for annual audits of your workers’ comp policy. Preparing ahead of time for an audit will save you time and money, which are both valuable commodities. Prepare for the auditor - Staying organized throughout the year is your first step. Make an effort to pull payroll reports, classification divisions, certificates of insurance, and have overtime payroll summarized before the auditor's appointment. In most cases, the auditor will use the information you have pulled together ahead of time. As long as your numbers match up with payroll records and W-2’s you’ll be in good shape. Set appointment that meets your schedule - Don’t let the auditor set a date and time that will not fit your busy schedule. Audits can take several hours and it’s important you stay with the auditor throughout the process. Proper representation of classifications - Make sure your exposures are correct. If an employee works 10% of the time in one class and 90% of the time in another class, even if the lower rated class is where most time is spent, the auditor can charge 100% of the time to the higher rated class. Placing each employee in the proper class is important. If you’re not sure what classes to be using or where employees should be classified, consult your agent. Owner payrolls - If an owner is included on the workers’ comp policy, then the payroll for the owner is based on a fixed minimum/ maximum figure. There is no need to report owner payrolls in addition to the employee payroll. The minimum/maximum varies depending on which state you reside in. Questions about this should be directed to the auditor. Owners need to keep a copy of the signed form which either includes or excludes them from the policy. If the auditor has any question about whether to charge owner payroll, the proof will be in the pudding. Overtime - Make sure you adjust payrolls, deducting the “bonus” pay from any overtime. Certificate of insurance - Make sure you have certificates of insurance from all subcontractors. Payments made to subcontractors without an insurance certificate could be charged to your payroll. Worksheet - Be sure to ask the auditor for a copy of the audit worksheet. Review and maintain this for your files. Audit corrections - Did you know you can request a review of your past audits? If you believe you were overcharged during a past audit, you have the right to request a corrected audit to get your money back. Your agent should help you review the final audit for accuracy. The workers’ comp audit should be compared to the current policy and to the general liability audit. It is important to compare payrolls and classifications for accuracy between the workers’ comp and general liability. Additionally, the agent should make sure the experience modification is being applied correctly. Kyle Kyle Rehme may be contacted via e-mail to michele@worldwidedrillingresource.com Kyle Rehme uses his personal knowledge of the water well, drilling, and environmental in- dustries to provide cus- tomers with practical insurance solutions. Preparing for Your Workers’ Comp Audit by Kyle Rehme VolkBell Property & Casualty Insurance, LLC , . *#! ' , , . &#," 1 0% "& 1 * ', &#," (%$ %% *() *,0 +- %,0 '+-* ' *#%% *+ 1 '- ,-* *+ 1 -))%# *+ 1'!#' *+ 1 ('+-%, ',+ 1 , * %% 1 ,"( # 1'.#*('& ', % 1 (," *& % 1 (' - ,(* (% *#%% *+ 1 #% # % *.# + 1 , * -&) *.# ) #* (',* ,(*+ /,(' * (*, (%%#'+ 49 WorldWide Drilling Resource ® MARCH 2016