Why do contractors get surprise workers comp bills?

Usually misclassified or higher-than-estimated payroll, wrong class codes, or uninsured subcontractors added to the policy at audit. All are reviewable.

How do I keep subcontractors off my audit?

Collect and verify each sub's own workers comp certificate before they work and keep it current. Unverified subs can be charged to your policy.

Can I dispute a workers comp audit?

Yes, when class codes or payroll were applied incorrectly. Accurate records and verified sub certificates support the dispute.

How are owners treated in the audit?

It varies by state. Owners and officers can sometimes be excluded or have capped payroll. We confirm how your state and policy treat it.

The Contractor's Workers Comp Audit Guide

Pass the audit without the surprise bill.

The workers comp audit is where many contractors get a bill they did not expect. This guide explains how the audit works, what drives the surprises, and how to prepare so the year-end true-up is accurate instead of painful.

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A workers comp audit trues up your estimated premium against actual payroll and reviews how your work was classified and how subcontractors were handled. Surprise bills come from misclassified payroll, wrong class codes, and uninsured subcontractors charged to your policy, all of which are reviewable and largely preventable.

How the audit works

Workers comp premium starts as an estimate based on projected payroll and class codes, then the carrier audits actual figures at the end of the policy term. The audit checks your payroll by classification and reviews subcontractors. If actual payroll is higher, or classified into higher-rated codes, the premium rises, and an uninsured sub's payroll can be added to your bill.

What drives surprise bills

Three things, mostly. Payroll classified into the wrong, higher-rated code, or field labor misallocated, inflates premium. Owner or executive payroll that should be capped or excluded, but was not, adds cost. And uninsured subcontractors, whose own coverage you could not verify, get charged to your policy. Each of these can be prevented with accurate records and verified sub certificates.

How to prepare

Keep clean payroll records broken out by classification, separate clearly subcontracted labor from your own, and collect and verify subcontractor workers comp certificates before they work and keep them current. Know how owners and officers are treated in your state. When the audit worksheet arrives, review it against what actually happened before you accept it.

If the audit is wrong

Audits can be disputed when class codes or payroll were applied incorrectly. The key is documentation, accurate payroll records and verified subcontractor coverage. We help contractors review audit worksheets and present the case to correct an overcharge.

Pass the audit without the surprise bill.

How the audit works

What drives surprise bills

How to prepare

If the audit is wrong

Common questions.

Audit coming up, or a bill that looks wrong?

Keep going.

Workers Comp Audit Review

Workers Compensation

Subcontractor Review

Make the audit accurate, not painful.