Workers’ Compensation Premium Audit FAQ

Premium Audits are a critical component of Workers’ Compensation insurance and must be conducted in some form or fashion for all Workers’ Compensation customers. The following FAQ outlines how an audit is conducted and what customers can do to prepare.

What is a Premium Audit?
A premium audit is a comprehensive examination of a Workers’ Compensation Insurance policyholder’s records, operations and books of accounts, in order to determine the actual earned premium for the coverage period provided, along with the correct classification of the operations.

Who will conduct the Premium Audit?
You will be contacted by either a Crum & Forster Premium Auditor, or a vendor representing Crum & Forster.

When is an audit performed?
Soon after your policy expires, normally within 10-20 days, you will be contacted in regards to completing the Premium Audit.

What types of audits are conducted?
If your premium is less than $5,000, we will perform a voluntary audit. All others are physical audits. A voluntary audit is when we send a request/form to you asking for you to complete the form and return it to us. Physical audits have an auditor physically visit you to complete the audit.

How do I prepare for my audit?
It is important to have a representative who is knowledgeable about the organization’s operating reality available to respond to questions involving operations, job descriptions, officers/owners and other questions.

Advanced preparation will help the auditor quickly find what he or she needs, meaning less of your time will be required for questions and/or clarifications during the actual audit. To make your audit as convenient and expedient as possible please be prepared with the following:

  • Payroll records showing total gross payroll by employee, by company or by department.
  • Payroll records showing overtime separately.
  • Certificates of Workers’ Compensation insurance for all subcontractors.
  • List of temporary employment agencies used during the audit period.
  • Business invoices & general liability certificate for all independent contractors.

What records will I need?
The following represents the most common records utilized in a successful premium audit:

  • Payroll registers
  • Quarterly payroll tax reports (state and federal)
  • Cash disbursements journal
  • Job contracts for contractors
  • Invoices for temporary employment agencies
  • Certificates of Workers’ Compensation insurance for subcontractors
  • Description of your company’s operations
  • A list of the corporate officers (names, titles and duties)
  • Certificates of insurance for subcontractors. (These are required for subcontractors, contract labor, etc.)

What documentation will be provided at the end of the audit?
A final audit statement is always provided. Auditor’s detailed worksheets can also be requested. They can only be sent directly to you, unless we have written approval requesting that we send them to your agent.