Premium Audit
An annual review conducted by your insurance provider to confirm that the payroll and job classifications you reported, accurately reflect your actual business operations for the year.
The audit ensures your premium is based on your true level of risk. During the process, your insurer reviews business records, payroll information, and other documentation to verify that your coverage and costs align with your company's actual labor operations and risk exposure.
What is a Premium Audit and why is it important?
Your workers’ compensation policy is issued based on estimated payrolls for the upcoming policy period of coverage. A premium audit is conducted at the end of the policy period, to determine the actual wages paid to covered officers, employees, casual/contract laborers and uninsured subcontractors. Every policyholder is required to comply with a premium audit.
How to avoid Premium Audit surprises
Audit surprises most often result from changes to the number of covered employees, their job duties and hiring of uninsured subcontractors. By notifying your insurance agent when change occurs, FCBI/Midsouth can adjust your estimated payrolls accordingly and help you avoid surprises. Remember, at the start of any job utilizing subcontractors, verify the subcontractors have workers’ compensation coverage. Failure to do so may result in higher premiums.
What if I do not comply?
The auditor will make two good faith attempts to contact you and perform the audit. If you do not provide the requested information, the audit will be closed as noncompliant. As per the terms of the policy, noncompliance of audit may result in policy cancellation and additional Audit Noncompliance fees.
Records Needed for Your Premium Audit
Individual payroll records for all entities covered by your workers’ compensation policy.
General ledgers, payroll journals, check stubs, and profit and loss statement.
Schedule C, State Unemployment Tax Reports or Individual earnings records, Federal 941’s and any 1099’s.
Total overtime per employee.
List of all officers and their payroll, including bonuses and fringe benefits, including copies of valid exemptions if the officers are exempt from workers’ compensation.
Amounts paid to any subcontractors and casual laborers, along with a description of the services they provided and a breakdown of how much was paid for labor. Also have the invoices for materials and equipment.
Certificates of Insurance or valid exemptions for all subcontractors and casual labor used during the policy period. Please note: If you cannot provide either an exemption or proof of insurance for your subcontractors, you will be charged premium for the amounts paid.
If you have any questions regarding Premium Audits, please contact the audit department
FCBI policyholders – by email [email protected] or call 866-469-3224.
Midsouth policyholders- by email [email protected] or call 844-438-6642
What if I don't agree with my audit results?
If you do not agree with the results of your audit, you will need to send a formal dispute request. The dispute request must be on your company letterhead and be signed by an owner/officer of the company. Your dispute must state the reason you disagree and include any supporting documentation. Remember to include your name and policy number on the dispute. The written dispute may be sent to us directly at [email protected] or be presented to us, on your behalf, by your agent.
If you have a policy with Midsouth Insurance, please email: [email protected]
Please Note
Our auditors will make two good faith attempts to schedule and conduct your audit. If contact cannot be established, your policy is subject to cancellation , and reinstatement will not be considered until the audit has been completed.
If you have any questions regarding Premium Audits, please contact the audit department
FCBI policyholders – by email [email protected] or call 866-469-3224.
Midsouth policyholders- by email [email protected] or call 844-438-6642
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