Workers Compensation Audit Procedures



Please be advised at the expiration of your current policy period for your workers compensation insurance, you have to complete an audit by the carrier. An audit will be assessed each time your policy expires or cancels. No refund will be issued on a worker’s compensation policy cancellation until the audit is completed.

If the audit is not completed by the deadline set forth by the carrier, the audit will be deemed uncooperative. This will result in a non-compliance charge and/or cancellation of your current policy in-force (even if the policy is with a new carrier). Once notification of cancellation occurs, cancellation certificates will go out to certificate holders immediately.

Tax records will be required at the time of the audit. No audit can be fully cooperative without tax documents from the policy term being audited. The following documents will be required dependent on your business:

If you had employees during the audited policy term, you will need to provide Federal Form 941 and/or State Unemployment Wage Reports (SUTA)

If you utilized non-employee services, you will be required to supply payment information for all contracted and sub-contracted labor and supply a copy of their Certificate of Insurance (if insured)

NOTE: If the tax documents above do not apply to your business, you must provide one of the following:

For a Sole Proprietor, the Profit or Loss (Form 1040) Schedule C tax form, pages 1 and 2

            For a Partnership, U.S. Partnership Return of Income (Form 1065) Page 1 and 1125-A

            For a Corporation, U.S. Corporation Income Tax Return (Form 1120) Page 1 and 1125-A

The Morgano Agency is not responsible for the completion of your audit. We will be happy to walk you through the process, if needed.  You are solely responsible to complete and submit your audit. Please refer to your accountant or contact the carrier directly with questions on the completion of the audit.

Please note the processing of the audit may result in additional premium based on the findings.

If you have additional questions, please contact our office.


Recent Articles