Workers' comp audits
Workers' comp audits, answered before the bill arrives.
Workers' comp policies come with an annual premium audit — and the auditor's job is to find reasons your premium should be higher than the estimate. Our job is to make sure the audit reflects what you actually owe, not what the auditor's first pass assumes.
What this is
Reconciling what the auditor found to what you actually owe.
Workers' comp premiums are estimated at the start of each policy year from projected payroll. At year-end (or renewal), the insurer audits your actual payroll and worker classifications and adjusts the premium up or down. The audit might be a desk review, a phone interview, or an on-site visit through your payroll records and job descriptions. Most of the time it ends in an increase — often because the auditor reclassified workers into higher-rate categories. Defending the original classification, organizing the records, and challenging incorrect reclassifications is what this service covers.
What’s involved
The pieces of a defended audit.
Pre-audit preparation
Before the auditor shows up, we organize payroll records, classifications, job descriptions, and subcontractor documentation. Most audit losses happen in disorganization, not in true reclassifications.
Class code analysis
Every worker is assigned a class code — in Minnesota, the codes set by the MWCIA, the state's own bureau (Minnesota doesn't use NCCI). The auditor looks for reasons to move people to higher-rate codes; we document the actual duties and defend the right one.
Subcontractor documentation
Use 1099 subcontractors? The insurer treats them as your employees for premium unless you have certificates of insurance proving their own coverage. We collect and organize the COIs ahead of the audit.
Overtime exclusion
In most states, the excess portion of overtime — the extra half on time-and-a-half — is excluded from the premium base. Auditors sometimes miss it; we make sure the records separate it out and reclaim it.
Audit response + disputes
If the auditor reaches conclusions we disagree with, we help you respond in writing with documentation and request review — and help you escalate to the Minnesota Department of Commerce, which regulates insurers, if it comes to that.
Trend tracking
Tracking your audit results across years catches insurer drift — when the same situation gets classified differently from one audit to the next, that's worth questioning.
Why it’s worth defending
What one wrong class code can cost.
$5 / $100
the correct class code
$15 / $100
the auditor's reclassification
$50,000 a year
extra premium
On a $500,000 payroll — the kind of swing a defended audit can prevent.
Why this is its own service
It sits at the seam between payroll and insurance.
Workers' comp auditors are insurance-company employees with an incentive to maximize premium — that doesn't make them adversaries, but it does mean they bring a default lens to classification questions. Most owners aren't equipped to argue class codes — Minnesota uses its own, set by the MWCIA rather than NCCI — or to spot a missed overtime exclusion. The auditor's first pass often pushes premium up; a defended audit often reduces or erases that increase. We've seen a contractor reclassified from a $5-per-$100 code to a $15-per-$100 code because the auditor didn't understand the actual job — on a $500,000 payroll, that's $50,000 a year. Worth the audit response.
Common questions
What people ask us about this.
Don't hand the auditor a blank slate.
Workers' comp audits go better when someone walks in with the records organized and the classifications defensible — instead of scrambling after a premium-increase letter.