We know the premium audit process can seem complicated. So we work hard to take the mystery and complexity out of it, while ensuring that you and your business are treated fairly. Our in-house, local, premium audit professionals are committed to making sure your business maintains the right level of coverage for your exposures and that you only pay the appropriate premium for that exposure. No more and no less.
When your workers’ compensation policy is issued, the premium is based on estimated payroll amounts provided to us by you and your agent. A final audit is typically done at the end of an insurance cycle or when a policy is terminated to determine actual payroll and exposures for your business. Your premium may be adjusted as a result of the audit. If exposures have been underestimated, an additional bill will be sent to you. If exposures have been overestimated, you will receive a billing credit.
Types of Audits
The type of your business or the size of your policy determines which type of audit method will be performed. We have two common audit methods:
- Audit by Mail – We do everything we can to help you focus on your business. So whenever possible, we conduct audits by mail. We send forms that ask for information about payroll, subcontractors, and similar items. With the proper records, a mail audit is easy to complete. Each form has clear instructions, but if you ever have any questions, please contact our premium audit professionals directly at (808) 524-3642 extension 431.
- Audit on Site – On-site audits help us get to know you and your business better. They give us the opportunity to see your business at work and ensure that the employee classifications are accurate. A HEMIC auditor sets up an appointment to review your records on-site. He or she may also ask to review your business operations.
Keep Good Records to Reduce Your Exposure — And Lower Costs
Here is a way you could save money on your workers’ compensation insurance. Since workers’ compensation premiums are based on payroll (which is defined as total payment for the services performed by an employee) the better you maintain payroll records that accurately reflect the services of each worker, the greater the likelihood you will be able to lower your insurance costs.
The accuracy and integrity of an audit is based on the quality of information provided to us, as well as the proper application of industry and manual rules. The information you provide to us at audit is important and serves as a starting point to verify, validate and document our determinations. The following information is needed to perform your audit:
- Accounting ledgers
- State and Federal tax reports
- Individual earnings cards
- Ownership tax receipts
- Cash disbursements
- Certificates of Insurance for subcontractors