Shamim Ahammed

They fail because their own keywords are fighting each other.

When you publish content without a clear structure, Google can’t tell:

Which page is the main authority

Which page deserves to rank

How your topics connect

What your site is actually about

The result? 👉 Cannibalization 👉 Confused search intent 👉 Lower rankings 👉 Wasted content budget

Keyword clustering fixes this instantly. It aligns your entire website into clean, logical topic groups that Google understands and rewards.

If your traffic is flat, your posts aren’t ranking, or your niche feels “too competitive,” you don’t need more content — you need a proper clustering and topical map.

I help brands build exactly that.

Have you ever poured hours into writing blog posts, publishing content after content, only to see little—or no—change in your website’s Google rankings? You’re not alone.

Here’s the truth: Most websites fail to rank not because of a lack of content, but because their content is scattered, unrelated, or targeting the wrong keywords. Google doesn’t reward volume. It rewards topical authority.

So what does that mean? Simply put, Google wants to know: “Is this website an expert in this topic?” If your content is all over the place, with random keywords sprinkled in, Google can’t recognize your site as a reliable source. That’s where keyword clustering comes in.

Keyword clustering is the process of grouping related keywords into logical, topic-based clusters. Instead of writing content for individual keywords one by one, you create a structured content strategy where every post supports the main topic. This not only helps Google understand your expertise but also boosts your chances of ranking for multiple search terms at once.

Think of it like organizing a library. If books are scattered randomly across shelves, visitors can’t find what they need. But if every book is placed in the right section, related topics are grouped together, and everything is easy to navigate, suddenly the library becomes a trusted, authoritative resource. That’s exactly what a well-planned keyword cluster does for your website.

💡 I specialize in helping websites organize content, build keyword clusters, and create topic maps that Google loves. This structured approach has helped many websites climb higher in search results and attract more targeted traffic.

People think SEO starts with writing content. It doesn’t. It starts with structure.

Every day I see businesses pumping out blogs, reels, ads — hoping something ranks, hoping traffic comes, hoping Google magically understands their niche.

But Google doesn’t “figure you out.” You have to show Google the map.

When your niche has no clear structure… When your pages aren’t connected… When your topics overlap or compete… When you publish without a cluster plan…

Your SEO is basically built on sand.

This is why most websites stay stuck in the “ghost traffic” zone — content everywhere but no architecture, no hierarchy, no topical depth.

If you want to build real authority and predictable rankings, a clean topical map isn’t optional — it’s your foundation.

I’ve helped countless founders and brands fix this mess, and the growth that follows is always the same: Clearer positioning, stronger authority, and content that ranks faster.

If you want me to check your niche structure, drop MAP in the comments.

And if you’re ready to get a professional, fully structured topical map + keyword clusters done for you, here’s my Fiverr service.

They’re failing because their content has no structure.

And this is one of the biggest SEO lessons people learn way too late.

You can publish 20, 50, even 200 articles — but if those topics don’t connect, reinforce each other, and signal a clear niche to Google, you’re basically leaving your rankings up to chance. It’s like dropping puzzle pieces on the floor and hoping they magically rearrange themselves into a picture.

Search engines don’t reward randomness. They reward clarity, depth, and relationships between topics.

That’s why topic clusters and topical maps matter so much in modern SEO.

A topic cluster acts like a “content neighborhood.” Every article supports another, and together they show Google: “Hey, this site actually understands this niche from every angle.”

A topical map goes even deeper — it outlines your entire niche in advance, shows what to write, how to interlink, which keywords belong together, and how to build authority step by step. It removes guesswork from content creation and replaces it with strategy.

When your website has structure, magic happens: • Google understands what your site is really about • Your pages stop competing with each other • You rank faster with fewer articles • Visitors click around more because the content flows naturally • You build real thematic authority — the thing algorithms love most

If you’re tired of publishing random posts and hoping Google pays attention, start with structure. Start with clarity. Start with a roadmap.

I help brands build that roadmap through keyword clustering, topic clusters, and complete topical maps designed for long-term growth.

If you want the same strategic foundation for your site, you can check it out here.

Depending on the type and quantity of products or services, business owners incur different costs at the end of each month. In addition to covering your costs from facilities, overhead, equipment, and wages, workers' compensation insurance and related claims are often overlooked.  

Why?

Most business owners believe that this aspect of management is beyond their control and oversight, leaving this process up to insurance companies and auditors. So it's not surprising to see auditors facilitating large adjustments to premiums after the policy's expiration date. 

These high costs can leave you feeling helpless. As a business owner, you can protect your finances from these listeners by being proactive.  

At Expense To Profit, we provide business leaders with proven strategies to reduce costs and improve their bottom line. Our previous article discussed the impact of inflation on wages and benefits. This article explores all the intricacies of workers' compensation insurance claims and how to conduct a proper audit. But above all : 

What Is Workers Compensation?

Workers' compensation is a form of insurance provided by employers to their workers. This is coverage designed to protect workers and businesses against the costs and expenses resulting from accidents and occupational hazards. 

It includes loss of work due to leave, legal costs in accidents, and medical expenses. While employers pay workers' compensation fees to insurance providers, on the contrary, providers pay these bills to employees after a valid claim is made. 

Each state in the United States has different requirements for workers' compensation insurance. Including how some companies pay workers' compensation to insurance companies. However, it is an ongoing requirement that insurance companies perform workers' compensation audits to check that companies are paying the correct premiums for their plans. 

What Is a Workers Compensation Audit?

A workers' compensation audit is a year-end review of your business records by insurance companies to make sure your company is paying the correct premiums for indemnity insurance claims. for workers. 

Depending on the insurance provider, a workers' compensation check can be done in person, by phone, or by email. So, what documents do auditors look at to verify your premiums?  

Payroll records, such as summaries, overtime payments, federal tax returns, state tax returns, and unemployment tax reports

Employee records, such as IRS Form 941

Cash disbursements for subcontractors and vendor payments

Nature of your business operations

Responsibilities of your workers

When Should You Expect a Workers Compensation Audit?

The workers' compensation audit usually takes place after the term of the compensation policy has expired. This allows insurance companies to review the documents and determine if you will continue to pay the same premiums for the next policy period. 

According to the National Council of Indemnity Insurance (NCCI), your insurer must notify you of the audit within 60 days. This gives you enough time to prepare documents and other information. Like paying taxes, these checks are required by law at the end of your contract. 

What Happens After a Workers Compensation Audit?

The workers' compensation check is for the purpose of determining if the premium you are paying for your insurance is correct. This can be played in three ways:  

Similar Bonuses: If your payroll, risk, and other documents match your estimates, your premiums will stay the same and you won't have to pay anything.

Lower premium: If your business risk and other documents are lower than your estimate, your premium will be lower than what you paid initially. As a result, your insurance company may owe you a refund.

Higher premium: You will have to pay the difference if your risk level is higher than your estimate after the audit.  

Often businesses pay higher premiums compared to receiving refunds for a lower premium.

Reasons Why You Are Paying Higher Compensation Premiums

There are a number of reasons why you might have to pay higher premiums after a workers' compensation check. They understand: 

Business expansion

Hiring more employees

Increase in payroll payments

More worker risk roles

These are valid reasons for higher premiums from your insurance provider. However, you can make mistakes that cost you dearly during the audit. These errors include: 

Failure to classify workers correctly: When it comes to bonuses, your workers are divided into different tier codes. These codes are used to calculate your worker's risk in the workplace. Higher-risk employees have tier codes with higher coverage rates, which contribute to higher premiums. However, if you incorrectly classify workers, you will have to pay higher premiums.

Wrong salary estimate: Accurate payroll estimates make auditing easier and better for your business. An inaccurate salary estimate increases the likelihood of guesswork and you could end up with an outrageous bill.

Paper errors: If your paperwork and documents are not properly organized, you may have to pay higher premiums.  

Excluding deductions: If you don't include deductions like severance pay or overtime pay (if it's more than your regular hourly wage), your insurance company will pay you a higher premium.

Do not confirm if your subcontractor has a certificate of insurance: Your subcontractors must have their insurance, as this is a requirement for a workers' compensation audit. Indeed, your insurance company wants to make sure that you only cover your workers. If they don't have a certificate of insurance, you will have to pay a hefty fee for the additional premium.  

You do not want to experience this.

How to Prepare for a Workers Compensation Audit

You need to prepare your business for a workers' compensation check. You need to take proactive steps to “test your reviewers” ​​and end up with higher rewards. What are the steps to make a reservation? 

Gather your records.

Your auditor will look at a list of documents. You should get the following documents ready:

Individual earnings

Checkbook

Bonuses paid

Worker wages and commissions

Accounting ledger

Numbers of hours, days, or weeks worked

Nature of business

The number of employees

Description of subcontractor work

Payments made to subcontractors

Job description for each worker

Receipt for inventory purchase

Keep these documents organized, so you can easily present them to auditors.

Update the Job Description of Your Workers

You must be fully aware of your worker's duties. This generates the right class codes to determine their risk of working for your company. 

Submit Accurate Records

Make sure the documentation you present to the auditor is accurate. Incorrect documentation often results in higher premiums. It is essential that an experienced staff member or consultant be available during the audit to confirm and clarify the details in the document. It is also necessary to review the audit documents before signing them. Take your time browsing the pages and ask questions if you are not specific. 

Conclusion

Completing the workers' compensation check may seem daunting, but the results can be in your favor. It is worth more than the time and effort. Our team reviews a customer's policies, premiums, and claim history to confirm that the insurance company is charging you correctly. In most of the audits we do, we find that claims are not handled properly. It is your responsibility to claim overpayments and request adjustments to your premiums. If you would like to discuss this matter with us, please contact us. 

If you're like most employers, hearing the word "check" is like watching red and blue lights flash in your rearview mirror when you know you're driving too fast. 

You can be 100% sure that your company's policies are correct, but as soon as you receive the inspection notice, roll down your windshield and blame it on your driver's license, registration, and ticket. excessive speed. as you suggested. What would you say if I told you that not all audits are worst-case scenarios? 

In fact, having an annual workers' compensation audit can benefit your business. The Combined Team understands the stigma associated with the audit process. Our commercial insurance experts have helped many employers overcome their fear of doing so and turn worker's compensation assessments into business resources. 

In this article, learn not only why an annual worker's compensation audit is important, but also how it can benefit you. In this short read, learn how an occupational injury audit can benefit your business. 

What is workers’ comp insurance?

Workers' compensation insurance provides benefits to workers who suffer a work-related injury or illness. It protects workers in the event of a workplace accident and provides financial assistance and medical expense coverage. It usually includes the following:  

Necessary medical treatment

Ongoing care or rehabilitation

Lost wages

Funeral expenses

Disability benefits

Workers' compensation insurance protects employers from high liability following an accident or injury at work. 

What is a workers’ comp audit?

When applying for workers' compensation insurance, the annual premium is an approximate amount for the year of coverage. Your premium price is determined by these 3 factors:  

Workers' Classification Rating - A rate usually set by the National Council of Indemnity and Insurance (NCCI) or an independent, state-regulated rating agency that assesses the level of risk associated with workers' work. The higher the risk, the higher the score. For example, Cirque du Soleil's high-flying acrobatics cost more than prizes given to neighborhood librarians. Why? Aside from angry science sponsors refusing to pay exorbitant fees, aero performers take on more risk in their work.  

Total Payroll - The total amount of remuneration an employee receives for their work. To determine an employee's premium payable, pay the employee's salary for every $100 of their gross salary. For example: If your sole employee earns an annual salary of $50,000 with an employee classification rate of $1, your gross pay would be an employee annual bonus of $500. 

Experience Adjustment Factor - A numerical measurement of past employee claims, used to predict expected insurance costs. The experience change factor measures three years of loss history against the cost of expected losses for similar companies. 

If previous standards are lower than expected costs, the experience modification factor is less than. However, if your previous bill exceeds the expected cost, you will receive the experience revision factor. greater than When estimating annual bonuses, a change in experience factor of less than reduces costs, and a higher value increases costs. 

What to look out for when forecasting premiums for a year? What do you notice about some of these factors? These may change during the year of coverage. If your business is doing well and you decide to hire more workers, your salary will increase. 

In addition, workers' promotion rates may change if, instead of hiring more workers, you decide to allocate your workers to different roles to increase productivity. If layoffs are affecting your workers, you get the big picture. 

At the end of the year, the estimated cost of insurance should be adjusted to reflect these changes. And how can you compare estimated premiums with actual year-end costs? With crash tests. 

A workers' compensation audit is a review of workers' pay stubs and classification records for the five policy years. It is used to determine if the estimated premium for a policy year matches the actual cost of insurance at the end of the year. 

Why should you do an annual workers comp audit?

The short answer to this question is "because we have to". By law, workers' compensation contracts that require a workers' compensation audit must be done at the end of the year. But if requirements alone aren't enough, explore the many ways that a workers' compensation audit can benefit your organization. 

5 ways your annual workers’ comp audit can benefit your business

Here are five reasons and benefits to conducting an annual workers' compensation audit.  

1. Your workers' comp audit prevents you from paying penalties

As a legal requirement, workers' compensation verification has legal implications. Failure to act on a capacity test notice can result in significant penalties. Depending on your business location, penalties for not completing the Annual Workers' Compensation Diagnosis will be added to your initial premium by 25% to 50%. 

2. Your workers' comp audit ensures your insurance premium is correct for your coverage

By checking workers' compensation, you can make sure you're getting the coverage you need at the right price. The purpose of reviewing worker compensation each year is to determine if estimated costs are over, under, or under budget. 

If you overpay at the beginning of the year, the difference will be refunded to you after the annual audit. In this case, the review is designed to save money. Without this insurance, you may not even realize that you have paid too much. If the estimated premium is less than the actual cost of coverage, you will be charged the difference after final review. 

Paying an extra premium at the end of the year may not seem like a benefit, but paying the difference each year ensures your business is in compliance and remains compliant with workers' compensation regulations. Please also note that insurance companies may perform audits within three years after the year of coverage. 

So let's say you haven't been through a workers' compensation test in three years and you need to be tested during that entire time. If you pay too few premiums over three years, the total number of claims you receive can become untenable. 

If the payment amount is not enough due to cheap financial planning, etc., you can avoid accumulating expensive insurance premium costs by doing an annual work accident report. 

3. Your workers’ comp audit eases the coverage renewal process

Workers are required to have workers' compensation insurance, with some exceptions. If the year-end review is not approved, the insurer may decide to withdraw the claim. This means you will have to find a new supplier. 

And with a history of workers' comp audit violations, finding a new trucking company can become increasingly difficult. In addition, any workers' compensation offer you receive may be more expensive due to your history of non-compliance. Conducting an annual workers' compensation audit makes it easier and cheaper to renew coverage. 

4. Your workers’ comp audit benchmarks insurance premium costs

After the annual audit, you will receive valuable information about the cost of your insurance premiums. This means you always have the information you need to compare your premiums with those of other comparable companies. 

5. Your workers’ comp audit incentivizes organized record-keeping

An employee compensation assessment includes an employee classification and an evaluation of total payroll costs. And how will the auditor verify this information? By reviewing job descriptions and payslips.  

To do this, these records must be up-to-date, organized, and available for review. Therefore, checking employee compensation is an incentive to have proper and accurate documentation. This protects you from other unrelated and potentially damaging compliance complications.  

Next steps to a worry-free workers’ comp audit

If you've ever been here, you know that just imagining exams can be scary. After reading this article, I know that I don't need to worry about annual salary review for employees. In fact, getting it done is good for you and your business. 

In this age of rapid technological advancement, marketing has started evolving. From the perspective of Bangladesh, a South Asian nation with faster economic growth; lots of educated people still stay in the shade of unemployment due to the lacking of skills required in modern days industry. Though this scenario has started changing, now unemployed people in the country started gaining knowledge on a particular skill, taking on hands-training. Government and private initiatives try to make a positive impact on their career journey by providing necessary training and resources.

Why Digital marketing instead traditional?

Digital marketing allows us to target more specific areas of the audiences, and get marketing results and insight instantly. No real-time data can be obtained from traditional marketing rather it takes much time to target specific audiences.

How to gain knowledge and expertise in digital marketing?

One can gain knowledge in digital marketing using online platforms, on hands training from different institutes. There are lots of training institutes providing online and offline training globally.

After training, he/she must practice regularly, and stay updated on digital marketing trends.

What is the top digital marketing course in Bangladesh?

There are several institutes providing digital marketing courses in Bangladesh. However, the digital marketing landscape changes every day. It is an ever-evolving industry. Not all institutes can adopt these frequent changes, and this causes a huge impact on the course curriculum. There are few institutes providing training online and physically. Here are some hand-picked institutes and courses they offer:

Complete Digital Marketing Live Course with SMM, SEO, Email, and Adsense

This course provides in-depth coverage of SEO, SMM, SEM, Email marketing, Google Adsense, fundamentals of WordPress, customization, content marketing strategy, etc. Check the course curriculum from here.

Advanced SEO Live Course (Search Engine Optimization)

SEO is an important part of digital marketing. SEO stands for Search Engine Optimization. SEO refers to making a website/blog site suitable for search engines (Google, Yahoo, Bing, etc.). The popularity of SEO is increasing as the use of the internet increases. You can do this course only if you know computer basics. This course will be conducted using live classes and screen sharing. What you will learn from this course are:

Foundation Concepts On Local SEO

Topic Selection And Keyword Research

WordPress Website Create & SEO

SEO & Branding

On-Page Optimization

Off-Page Optimization & Backlink

Google Webmaster, Analytics & Tag Manager

Advance SEO Audit

Career opportunity as a Local SEO Expert

Google Analytics, Adwords, and Adsense

Freelancing Marketplace

What are the responsibilities of a digital marketer?

The responsibilities of a digital marketer can vary based on the specific role, company, etc. However, a digital marketer usually creates marketing strategies, create and manage content, optimize the website, manage social media and e-mail campaign, analyze marketing data, optimize conversion rate, handle online PR, manage marketing budget, and collaborate with other departments in order to accomplish the marketing goal.

Benefits and compensation of a digital marketer

The benefits of a digital marketer can vary based on location, industry, company size, experiences, specific job responsibilities, etc. Here is a general overview of the potential benefits and compensation of digital marketers.

Compensation: The compensation of digital marketers can range significantly based on the factors mentioned above. Here is an overview of the potential annual salary of a digital marketer in Bangladesh:

Entry Level: Entry-level digital marketing position offer with a range of $3600-$6000 annually.

Mid Level: Digital marketers with a few years of experience can earn salaries from $6000-$8000 annually.

Senior Level: Senior digital marketers of those who have years of experience and expertise in digital marketing can earn a salary from $10000-$15000 annually.

Benefits: The benefits offered to a digital marketer can greatly impact an overall compensation package. Common benefits might include:

Flexible Work Hours

Paid Holiday

Professional Development

Performance Bonus

Stock Options

Employee Discount

Wellness Program

Career Growth

It's important to note that these benefits and compensation might change based on location, culture, company size, etc. Researching company profiles, benchmarks, and industry trends can help you to provide a better understanding of what to expect in terms of getting benefits and compensation as a digital marketer.

Jobs after digital marketing course

After completing the digital marketing course you will have a wide range of job opportunities available in the field of marketing and related areas. Here is a list of some common jobs you can pursue after completing your digital marketing course:

Digital Marketing Specialist/Manager

Social Media Manager/Specialist

Content Marketing Specialist

SEO Specialist

Web Analysis Specialist

PPC Campaign Manager

Content Planner

E-commerce Marketing Manager

Online PR Manager/Specialist

It's important to note that job responsibilities and job roles can vary based on location, company policy, company culture, etc.

I have repeatedly received the following comments from customers; "Stuart, don't worry about [this year's] audit this year. We got a refund of the labor audit." This mentality is understandable since everyone knows how difficult it is for an insurance company to split their (your!) money. The client believes that receiving a reimbursement check after a workers' comp audit should be an indicator of processing, valuation, etc. Fit. But that's not really the case. 

Almost all of the workers' comp audit reimbursements you'll receive from your workers' compensation insurance company happen when business activity (payroll) declines. For work compensation, you must pay a fee for every $100 of wages. So of course you'll get a workers' comp audit refund at the end of the year if payroll falls short of your original payroll estimate. This is the usual result of a workers' comp audit and has nothing to do with fair valuation. 

Workers Comp Audit: What Could Go Wrong?

In fact, when I did a workers' comp audit on past overcharging policies, I found errors that caused the workers' comp audit refunds to be even between the years. which annual payroll audits return refunds and the years leading up to additional premiums. You could have gotten a $7,000 refund, but he must have $27,000!  

One of the reasons errors are so common is that there are so many moving factors in the accurate calculation of premiums. 

Determining accurate work comp payroll

Determining proper employee classification

Auditing Experience Modification Rate data

Schedule Rating (safety) Debits & Credits

Auditing Contractor's Credit Calculations

Proper application of mid-term endorsements

Rating Bureau rule & State Regulation compliance

and so on....

What Else Could Go Wrong Beyond Your Workers Comp Audit?

In addition to excessive fees that can be resolved with a workers' comp audit, there may be some issues that you can only resolve with an extension. Maybe you're not in the right program. Depending on your claim history and risk tolerance, you may be able to see the overall cost of a guaranteed cost vs. with group restrictions and discover that there are better ways to finance this risk (save money). 

Beware Of The Work Comp Sleight Of Hand

Another issue with your renewal could be to carefully consider your rate and "underwriting company". Is your service provider competitively priced? Has your account moved from one of your carrier's lower-priced registrars to a higher-priced registrar? This is a common way for workers' compensation providers to maintain the amount they charge in a reduced rate environment or when your experience change rate calculation is reduced. 

For example, a traveler has several registrars (not an exhaustive list, like what I found in my head!), each with different rates:  

The Travelers Indemnity Company

The Travelers Indemnity Company of America

The Travelers Indemnity Company Of Connecticut

Travelers Casualty and Surety Company

Travelers Casualty Insurance Company of America

Travelers Property Casualty Company of America

etc.

I am currently looking at a Missouri based company (Traveler account) whose history is:  

19/20 Current Policy - The Travelers Indemnity Company Of Connecticut (most expensive of these 4 based on currently filed MO rates)

Last year 18/19 - Travelers Compensation Company (2nd most expensive of these 4 based on MO rates currently filed)

17/18 - The Travelers Indemnity Company of America (least expensive of these 4 based on MO rates currently filed)

16/17 - Travelers Property Casualty Company of America (3rd most expensive of these 4 based on MO rates currently filed) 

(Important: it is not a blow against tourists. All insurers do this because national regulations do not allow an individual insurer to prioritize their rates.) 

So this company may not know (yet) that it has faced increasingly expensive underwriters over the past 2 years. The pay environment in the workplace in Missouri, like the rest of the country, has declined in recent years, but a company like this has failed to capitalize on its benefits (at least not by any means). is the full benefit). 

Many customers are working hard, reducing claims and reducing experience mods, but are still not seeing the price drop as expected due to "circumstances" such as a change of underwriting company, an increase in debit price (or a decrease in credit). use), etc. feel that "something is wrong" often their instincts are correct. 

How Do I Know If I'm Getting A Good Price For Workers Comp Insurance?

A good starting point is to calculate your costs per full-time employee. If calculating this metric annually, you can use it to benchmark it by comparing it to industry results found in RIMS's annual benchmark survey. It's pretty straightforward to calculate the total cost of workers' compensation/headcount, but let me know if you have any questions (e.g., how to account for seasonal and temporary workers). 

Cost per FTE helps you see through the shadow of wage fluctuations. Your rising or falling payroll makes it hard to tell if your plan is getting more expensive or cheaper. When you hire, you expect to be paid more for paid work and the business will increase tremendously. However, as your payroll grows, you can track this cost per FTE to ensure the increase is ONLY caused by your payroll increase and not by some other factor. 

On the other hand, if your total work compensation costs decrease as a result of reduced business activity (payroll), you may receive lower reimbursements and total renewal prices while your overall cost per employee is reduced. Your time increases. In this case, assuming your plan is getting cheaper due to lower pay is an illusion if your cost per FTE is indeed higher. 

This entire discussion assumes that you do not experience volatile changes in claims each year, which would have a reasonable impact on the expected loss, price, and cost per FTE. your. But if you're steadily or steadily improving in claims management and your plan costs (cost per FTE) aren't keeping up, there's a reason. And, an independent audit could expose that or those reasons. 

Please Don't Tell Anybody (Broker) Where You Heard This!

Calculate your cost per FTE and even go back a few years. Then share the numbers with your broker. Let your broker know that you are watching this and ask them to help you lower this indicator. If you're not getting good pricing options, cost containment ideas, back-to-work ideas, and more, let me know (I have a lot!). 

Why This Is Important?

Finally, I posted the image below a month ago and I really think the upcoming checks (policies expiring in late 2020 and early 2021) will be complicated. While you can expect refunds from workers' comp audits and reduced premiums due to lower payrolls, let's be diligent about keeping everything else in place. We don't want bigger and more costly problems once our businesses and economy return to normal. 

Many factors determine the cost of your workers' compensation insurance, and fortunately, changes in your business, your employees, or the way you work can reduce costs. The easiest way to tell if you're overpaying for workers' compensation insurance is to do a simple self-examination. Here's a simple eight-part test to help you determine if you can save money on your workers' compensation policy.  

Most businesses have changed in some way during the pandemic. Has your company changed the type of work it does? Has your company stopped performing certain jobs or tasks? Take a moment to review your job classification regarding your workers' compensation policy. Is all this work still in progress? Are they always executed at the same dollar rate? Be sure to note any changes and be prepared to share them during your annual audit.  

Do you have people on paid leave at any point during the pandemic? If you paid one of your employees but they don't work for that payment, you can save money on your workers' compensation policy. We've seen this happen with a number of employers that have received PPP funding. PPP loans allow employers to keep their employees on the payroll, but because the business is not fully operational, their workers' compensation costs go down. 

Are there any overtime, vacation pay, or wages in effect that should be credited to the payroll number? Do owners and managers have a salary cap? It is essential that you know what credits are available for your business and exactly how those credits apply to your business. Be prepared to split the amount of either credit with your auditor.  

Have you used or worked with any subcontractors? If so, did you get proof of insurance from them so you're not responsible for paying their workers' compensation insurance? Now is the time to fix this problem. Many companies pay more for workers' compensation insurance unnecessarily because they do not receive insurance certificates from their subcontractors.  If you have not received a certificate of insurance from your subcontractors, please ask for it now or request it directly from their insurance agent. Your company must be listed as a certificate holder on the certificate. If you make the mistake of forgetting to get this certificate of insurance from contractors you've worked with, create an internal process so it doesn't happen again.  

Do you have a return-to-work program? The return to work program allows employees with less serious injuries to work in a manner that has been tailored to their injury. A return-to-work program not only reduces the impact of future loss of bonuses but also allows your employees to continue to receive their full pay and benefits.   Every employer should create a job bank of different roles that people can fill while adjusting to their previous jobs. Think of ways to do things that are less physically demanding or less stressful. Studies show that once people are engaged, they are more likely to try to be more and more helpful at work. There is no evidence that people will stay in the least demanding jobs for as long as possible. Actually, the opposite is quite true.  

Did you take on a new job, new employee, or new subcontractor? It is important that you stay up to date with these changes. Many businesses have adapted to new opportunities and this has allowed them to survive and even thrive in a time when everything has come to a standstill. You should ensure that you notify your broker or insurance agent of the changes you have made so that they can ensure that you are properly covered without overpaying. Take the time to understand the impact of these changes and talk to your workers' compensation insurance broker or agent to determine how best to reduce unnecessary risk or additional costs.

Do you have a plan to help injured employees other than taking them to the emergency room? Instead of taking them straight to the emergency room, it is better to refer them to an urgent care clinic for less serious injuries. Emergency rooms are ideal for true emergencies, but they are also often used for non-emergencies. This leads to lower quality of care, longer waiting times, and higher costs. There are countless urgent care facilities that are sometimes referred to as urgent care, labor clinics, walk-in clinics, or ready-made clinics.   When it comes to costs, statistics show that the cost of medical services for your employees will be at least 30-40% lower if you use an urgent care facility instead of an emergency room. This alone will reduce your workers' compensation insurance costs by reducing the cost of claims that you cannot avoid. These urgent care and labor clinics can do a better job of monitoring than the emergency room. An occupational medicine provider at an urgent care center has experience with workplace injuries and will regularly develop treatment plans to get your staff back to work as soon as possible. That's not what you're going to get when you take a lightly injured employee to the emergency room.  

Workers’ Compensation Audit Policies are subject to Premium Audits from the insurance company- Why?

Workers' compensation requirements may vary from state to state, but many policies include a regular bonus review process. Unlike most other commercial insurance (such as property and casualty insurance) where potential risks can be identified in advance and the premium expenditure is final, workers' compensation premiums paid at the beginning of the policy period are provisional amounts. 

In other words, these premium expenses are only estimates based on salary and job projections for the organization's next insurance period. However, the purpose of a worker comp audit is for the insurance company to evaluate the organization's actual salary and work done at the end of the policy period to determine if the original premium amount was reasonable. 

Depending on the outcome of the premium review, the organization may be obliged to pay additional fees to the insurance company or recover the money from the insurance company. Read this guide to learn more about worker comp audits, how to prepare for an audit, and what to do after a worker comp audit.  

Worker Comp Audits Explained

To better understand award judging, it is important to first look at how workers' compensation awards are calculated. Organizational bounties are primarily based on three key factors: 

Worker Classification Rate: First, workers are assigned a class code based on the work they perform and the perceived level of risk associated with that work. These codes are associated with specific workers' classification rates. The higher the rating, the higher the employee's job risk. For example, a roofer would be rated higher than a carpenter because of the risk of tipping. Such rates are usually set by the National Liability Insurance Council, although some states use other systems.  

Salaries: Next, you need to check salaries across your organization. As part of calculating workers' compensation benefits, the organization pays each employee a classification rate for every $100 of salary. Think of your organization's scoring rate and gross salary as the two factors used to generate manual bonuses. This means that the formula for an organization's manual bonus is (employee classification rate) x (salary/100). 

Experience Modification Factor: Finally, the organization's Experience Modification Factor (also known as the Modification Factor) is calculated using the last three years of loss and salary data, excluding the most recent year of insurance enrollment. The organization's actual losses are then compared to the expected losses by industry. A mod factor greater than 1.0 is a debit mod, meaning that your organization is losing more than expected, resulting in higher bounties. A modulation factor of less than 1.0 is credit modulation, meaning that your organization is losing more than expected and your bounty will be reduced. 

Putting these factors together, the general formula for workers' compensation is the organization's manual compensation multiplied by a modifying factor. However, since the first premium payment occurs at the beginning of the policy period, the elements of the manual premium formula are only estimates.  

Finally, during the life of the policy, employee job responsibilities and job descriptions may change, and the employment rate may change accordingly. Additionally, your final salary may vary for a variety of reasons (promotions, layoffs, etc.). That's why we need worker comp audits. 

Worker comp audits are conducted at the end of the policy period, usually within 60 days after the policy expires. These audits allow insurers to verify that manual premium calculations were correct. 

If any element of the manual premium formula differs from the original estimate, the insurance company recalculates the premium cost. Depending on how these factors change, this new calculation will result in either the organization's insurance company charging the organization for additional premium expenses or the insurance company reimbursing the cost difference between the premium amounts. Refunds of premiums may be made in the form of a check or, in some cases, in the form of a deduction to the next premium.  

Some states require a bonus worker comp audit for all workers' compensation plans, while others require a bonus worker comp audit for organizations whose estimated annual compensation exceeds a certain threshold (e.g., $10,000). Only worker comp audits are required. State-level departments are responsible for conducting regular evaluations to ensure that insurers are conducting all required premium reviews. 

Premium audits can be conducted remotely, such as by mail or telephone, or in person. Larger organizations with higher bonus spending or more complex manual bonus calculation elements (such as multiple different sets of employee classifications) often require onsite testing, while smaller organizations with lower bonuses typically conduct remote testing. However, organizations in certain high-risk industries may be required to conduct in-person audits regardless of premium size or cost.  

Auditors may work for an insurance company that covers workers' compensation insurance or may be hired through a third party. Either way, these audits aren't surprising. It's pre-planned so your organization can prepare.  

Preparing for an Audit

There are several ways an organization can prepare for a successful premium audit. First, it is important to have a detailed and systematic record of the following documents for the Examiner: 

Tax Information: This includes W-2 Forms, 1099 Forms, Forms 941, Forms 944, and your organization's federal tax returns.

Payment and Payroll Records: This includes ledgers, payroll, overtime pay records, material and labor payments, state unemployment tax reports, and personal income records.  

Employee Information: This includes a detailed overview of each employee's job function, grade level, and work schedule.

Insurance Certificates: This includes independent contractor or subcontractor insurance certificates. Note that if the contractor your organization uses does not have its own workers' compensation insurance, you may need to cover it. Additional Business Information: This includes a general ledger, sales journals, receipts, sales tax records, correction factor worksheets, a detailed overview of business operations, and information about each owner and partner within the organization (if applicable). 

In addition to providing these documents in an orderly manner, it is important for organizations to ensure that the information provided to auditors is accurate. Providing false information (such as false payslips, false job resumes, false tax returns, false insurance certificates, or incomplete financial statements) may result in criminal prosecution by state insurance agencies for insurance fraud. 

So always make sure your organization's documents are accurate and truthful. For telephone and in-person audits, ensure that the auditor's questions are answered by knowledgeable personnel. 

After the Audit

Once the review is complete, the reviewer will send a report to your organization detailing their findings, such as whether any changes to the classification records are required and whether the payroll was correct.  

From there, you'll know if your organization needs to pay an additional reward fee or get a reward refund. If you agree with the examiner's findings, it is best to take necessary action immediately (such as paying the additional fee or updating the classification record). 

On the other hand, if you disagree with the audit report, you can file an objection. Always contact your insurance company directly for information on how to properly dispute a premium review. Most insurers require audit disputes to be submitted in writing by a certain deadline, detailing the problem (with reasonable grounds), and proposing alternative solutions. The insurer will then carefully consider your dispute and determine if an audit review is necessary.  

Obligations to pay additional premiums are generally suspended until the dispute is resolved. If the insurance company does not resolve the dispute as desired, you can challenge the agreement with the state workers' compensation board. For further guidance regarding this scenario, it is best to consult an attorney. 

PAYGO Policies

To minimize the risk of having to pay large audit fees at the end of the contract term, some organizations choose pay-as-you-go (PAYGO) employee compensation. The PAYGO policy allows companies to calculate premiums based on actual payroll information and pay premiums in real-time instead of when insurance is taken out. 

Nevertheless, the PAYGO Guidelines do not exempt companies from the premium audit process. Organizations with a PAYGO policy should perform periodic checks to ensure that benefit calculations are accurate. However, premium reviews associated with such policies typically result in lower excess costs than traditional workers' compensation policies.  

Closing Thoughts

Overall, it is important for organizations to have a clear understanding of the premium audit process and how it impacts workers' compensation costs. Most importantly, make sure your business is fully prepared for an audit. Never ignore an insurance company audit request.  

Each year, American workers suffer nearly three million non-fatal workplace injuries. These incidents can have devastating consequences. They can rob families of income, lead to huge medical bills, and transform people's lives.  

Workers' compensation should be a safety net that helps injured workers pay their bills and get back on their feet. But often this does not happen. Claims are denied, payments are delayed, and workers are denied the help they deserve. If that happens to you, there is hope. Here’s what to do when workers’ comp won’t pay.

The Big Problem With Workers’ Compensation 

The main problem with workers' compensation is that claims are handled by third-party insurance companies. Most employers who are required to provide workers' compensation do not have the ability to process these claims in-house. Even if you could, it wouldn't be efficient. 

Instead, employers take out third-party insurance companies and employee compensation insurance. This insurance company will handle any claims that arise against him. However, insurers don't want to pay more than they need because insurance payments put pressure on their profits. So you can: 

Reject claims based on procedural or timing issues

Argue that you were not on the job or were doing unauthorized work at the time of your injury

Argue that you are not a covered employee entitled to compensation

Attempt to shift the blame for your injury onto you

Contend that your injury is not or should not be serious enough to support a claim

Dispute the fact that you sustained an injury at all

Dispute the fact that your injury occurred on the job and is the result of a workplace incident 

In each case, the results can be the same. 

You don’t receive the money you deserve

The insurer fails to pay for the necessary medical care you receive 

You struggle to get the care you need because you cannot pay for it

You face financial frustration and stress on top of your injury and loss of income 

Other Problems

Another common problem is the complexity of the workers' compensation system. Each stage of the process has a myriad of rules and deadlines. Few workers are familiar with these procedures, so injuries can be difficult to track. 

Simple mistakes like missing a deadline or submitting the wrong documents can turn a lawsuit into a blank slate. To make matters worse, insurance companies have experts who will catch every little mistake and exploit it to deny your claim.  

Employers can also complicate matters. They may:

Miscommunicate important information

Fail to record or report your injury when you report it to them

Use hiring practices that cause your job to fall in a “grey area” that gives insurers room to argue that you do not qualify for benefits

Even if an employer intends to cooperate, it is unlikely that they will counter the machinations of their employees or help them obtain insurance if the insurer refuses. 

Finally, in rare cases, workers' compensation insurance may not be available. For example, very small businesses may be exempt from worker's compensation insurance due to the high cost.  

Similarly, freelancers or contractors may not be eligible for workers' compensation insurance under the law. Luckily, that doesn't mean you have no options.  

What to Do When Workers’ Comp Won’t Pay 

Even if workers' compensation doesn't cover your injury and related costs, all is not lost. You have a choice. 

First, you can file a claim adjustment request with the Illinois Workers Compensation Commission. This allows you to advance your entitlement to benefits by requesting a hearing and requesting immediate payment. If the insurance company continues to refuse to pay you without good reason, you may be subject to fines and legal fees for misconduct. 

Next, you can consider the possibility of third party liability. This is when someone other than you or your employer is responsible for your injury. Liability to third parties may be in whole or in part, depending on the circumstances.  

For example, if an injury is caused by using a defective tool, the tool manufacturer may be partially liable. Even if you are not entitled to workers' compensation for any reason, you may still be able to claim damages related to your injury. 

Or, if you are injured while working for your employer on the premises of another company, that company may be held responsible for the accident. 

What Not to Do

Under no circumstances should you attempt to negotiate with the insurance company handling your case. Few, if any, workers need the experience and legal knowledge to settle a situation with an insurance company in their favor.  

If you accept any settlement or terms from your insurance company, you will forfeit your right to future coverage. This is true even if your insurance company charges you far less than you need or earn. 

Why You Need an Attorney

The biggest open secret to winning a work accident is to hire an attorney. If you don't have a lawyer, you're at the mercy of the insurance company. This is a very unfair battle because insurers:  

Are more informed about the law

Have more resources with which to fight

Are not grappling with injuries, medical bills, loss of income, and other stressors at the same time

A lawyer will ease the burden of your claim. It gives you the freedom to focus on your treatment and other needs while negotiating on an equal footing with your insurance company. 

Attorneys also know the deadlines and filing requirements associated with workers' compensation. They help you navigate the process and avoid rejections due to technical or procedural errors.  

Additionally, our attorneys have the experience to understand what to expect in your case. It may prevent you from accepting terms that are not in your favor. Insurance companies know this, and many stop denying or reducing your claims once they know you have a qualified attorney for your case.  

As a bonus, lawyers can often advise you on any additional money you are entitled to, such as fines. 

Penalty Funds

Workers suffer when the insurance company does not pay the injured workers the amount owed. If workers' compensation delays treatment by not paying for medical care, workers' injuries may become more serious instead of cured. Also, what happens to medical expenses if workers' compensation is denied? They often go unpaid, causing debt, stress, and credit deterioration. 

Legislators know this and have penalized insurance companies that illegally delay or deny claims for damages. Penalties for late workers' compensation vary depending on:  

Your state

How late the payment is 

How many payments were late

Depending on the circumstances, fines may take the form of a set amount or a percentage payable. In extreme cases, penalties can force insurance companies to pay workers twice what they were originally owed and cover workers' legal costs. The insurance company may also be required to pay:  

Fines set by the state workers’ compensation agency 

Interest, fines, or fees charged to workers by health care providers over medical bills they were unable to pay on time

Other costs resulting from the insurer’s refusal to pay the claim on time

The exact level of penalties that apply will vary on a case-by-case basis. Only a lawyer can help you:  

Identify what penalities apply

Hold insurers legally accountable

Ensure that insurers pay all applicable penalties

Prevent future late payments or denials by insurers 

A Special Note for First Responders

First responders may be subject to different workers' compensation rules and timelines than workers in other sectors. For example, the Public Service Disability Act (“PEDA”) provides broad financial protection for first responders. 

All workers who have an accident at work should contact an attorney, but it is especially important for first responders to do so. Otherwise, you miss out on the important and unique benefits you get. 

Get the Help You Need

Employee compensation audits can be cumbersome, costly and generally unpleasant. Most states require this type of testing, so avoiding it entirely isn't an option. However, with the right combination of planning and advice, you can avoid large unexpected bills and be on your way to long-term earnings. 

A workers' compensation audit is performed for the simple reason that it allows insurance companies to verify that premiums paid on workers' compensation insurance are accurate. Reviewers typically assess the accuracy of risks, classification codes, experience modifiers, and reward amounts. If there is a discrepancy, the examiner will request an adjustment and will usually charge a premium within a very short timeframe after examination. 

This can make you appear to be at a disadvantage. However, there are various strategies and tactics that can put you in an advantageous position. As with any contest, it all starts with preparation.  

Preparing for the Audit

Auditors conduct audits in a variety of ways, depending on the level of risk, history with the client in question, and the results of previous audits. The three main types of audits are post audits, telephone audits and on-site audits.

There are other types, such as midterms and preliminary exams, but they are less common. Audits are normally conducted within 60 days after the expiry of the previous period's policy. The insurer reserves the right to review such policies within three years after expiration, although this is less common than his 60-day review period.  

When contacted by auditors, it is essential to respond in a timely manner. A simple mail or phone audit is very easy and, when performed in a professional and timely manner, can show integrity in the carrier's eyes. On-site audits take more time to prepare for personal visits. 

The biggest tip for a smooth exam is to prepare exactly what to expect when the proctor arrives. Be sure to ask the following questions during the planning process: "What exactly do I need to prepare to ensure a smooth and timely inspection?" We are happy to provide this information because we are thinking about it. 

I once heard a story about an accountant who spent all day in a client's office. It tells me one thing: The client did not have the information the auditor needed and had to seek it out on site. This indicates a lack of organization and can negate the perception of the insured in the eyes of auditors representing the shipping company. 

Avoiding the Pain

Staying up-to-date with salary and employee classification changes throughout the year is critical to avoid the hassle of auditing large bills. It's also important to hire agents who understand how your business operates and how things can change throughout the year.  

Significant salary changes, class codes, and even projects not known or disclosed at the beginning of the contract term can cause an unpleasant experience at the annual review. 

Here's the problem: It's impossible to predict the future, but an inaccurate salary forecast can end up costing you a lot. For example, let's say you anticipate a $5 million salary, but you receive a large order in the middle of the year.

To fulfill this contract, his salary would have to be increased to $7 million. Great news, right? You've had a successful year of him, so you're just getting bills for the difference from workers' compensation insurance. 

A $5 million commitment gives you a higher interest rate than $7 million. why? Because the relationship between rating and exposure exists on a sliding scale. In this case, the fee will be higher, but he will pay $2 million as an additional commitment. Inaccurate projection can also cause burns along the way. 

For example, if you expect a $5 million salary and only have $3 million on hand, most likely you won't get your money back on that promise. This is called audit up or audit down. Testing is usually done. Audits and refunds are less common.  

Another issue for insured persons is the division of wage amounts. For example, if you have an office worker who is in the office 90% of the time but occasionally works in a warehouse to move and sort goods, the auditor may assign that person a higher percentage because of stress in the warehouse. may be reclassified in 

There are two ways to deal with this dilemma. You can (1) limit the employee to inefficient work, or (2) intervene with an agent to negotiate with the carrier. There is no guarantee that these negotiations will lead to positive outcomes, but they are necessary steps. 

The same applies to drivers who load cargo or direct field operations. In some cases, a review may reveal that the classification has been incorrect for years and that the insured has been overbilled over a long period of time. The difference in cost per class code can be large. 

While it may not be possible to change payroll and HR responsibilities in advance, these costly problems can be avoided with relatively simple fixes. An experienced insurance partner.  

This person updates payslips and sales figures quarterly and analyzes them for potential classification problems. Given the very thin profit margins currently seen in the energy industry, taking action could mean the difference between a profitable year or a failing one. Expert opinion can also help you improve the efficiency of your business, supply base and operations.  

Having detailed discussions with insurance brokers when analyzing where we need to cut and how we can streamline or improve could provide a significant competitive advantage when oil prices rise and labor demand increases. is brought. Managing sales is the most important thing at this point, but there's nothing wrong with watching your bottom line. 

Proactive Measures

The ideal scenario from the insured's point of view is a 'proactive service calendar' with an agent. I cover this concept in more detail in my book Buying Insurance, but the general idea is: First, make sure you have a broker who understands your business and your plans for the next 12 months or more. 

This synergy allows brokers to determine the best possible results in terms of contact frequency. Rapidly growing businesses may require monthly checkpoints to add new locations, equipment, employees, etc., but most businesses will need quarterly checkpoints. . A conference call is usually sufficient for this to work. However, if the insured has the time, a personal interview can do no harm. 

Listen: Will you meet with your agent once a year for renewal and then receive an invoice from your agent? If yes, continue. Insurance is now a much more strategic tool and can play a key role in enhancing your bottom line. But insurance can also be a silent killer if left alone. Consider the following example. 

Many businesses in Houston and Florida did not have flood insurance. Often it was just complacency. Her longtime broker didn't think strategically and only showed up when the deal was extended. This underpreparedness was overcome after Hurricanes Harvey and Irma, showing that small annual investments could have avoided catastrophic costs.  

The same applies to employee compensation checks. Working with an agent as a strategic partner can help with the verification process and lead to significant savings. However, if the agent fails to track it, they may end up paying very high interest rates that are unexpected and completely avoidable.  

Final Thought

If your company has workers' compensation insurance, it is important that you take steps to protect yourself and your company from excessive premiums being paid to insurance companies due to misclassification of workers.  

If you apply for Workers Compensation Insurance to an insurance company and it is accepted, your company will receive Workers Compensation Insurance and Employers Liability Insurance. It is important that you or your consultant review this document. In general, this document explains what insurance companies can do, what steps they can take to determine premiums, and what the company's responsibilities are. 

This document also includes an estimated insurance premium. A premium is the amount you pay for coverage provided by an insurance company. Bonuses are determined by a variety of factors, including each employee's classification. It is important that companies provide the correct classification when applying for insurance. If these are not listed or listed incorrectly, the insurer will assign a classification and related charges based on its assumptions and conclusions.  

The insurer evaluates the salary and multiplies it by a set percentage based on the revised classification. Fees vary depending on the job content of each employee, with higher-risk jobs costing more. For example, roofers and frame builders receive higher wages than office workers. In general, a higher proportion of people are in high-risk jobs.  

Under the insurance contract, the insurance company may conduct a workers' compensation audit. During a workers' compensation audit, the insurer reviews business records related to the classification of insurance policies and employees. This may include ledgers, journals, registers, receipts, contracts and subcontracts, tax reports, payroll and payment records. The wording of the policy determines the timing of the audit. 

Checks are usually done in person during business hours or electronically by submitting the required business documents. Insurers may state that checks will be made to determine if the insurer is overpaying the premium, but the final premium is actually paid by the insurer when the claim is made. It may also be done to determine if the premium is higher than the premium you expect to receive. for it. This means that companies have more debt than their estimated premiums, sometimes growing exponentially. 

It is very important for companies to follow the workers' compensation audit process. Failure to comply may result in the cancellation of your insurance policy and problems with future insurance coverage. If the company is found to be in violation of the law, future workers' compensation claims may be denied.  

Once the review is complete, the insurer will provide a final premium based on the information provided. Many businesses can get into trouble if they don't provide accurate or complete information. In this case, the insurance company may set the ultimate premium much higher than the company expects. 

In our experience, these amounts exceeded expected premiums by hundreds of thousands of dollars. After receiving the final premium bill, it is important for the company to decide how the amount will be calculated. If this determination is delayed, it is very likely that the insurer will sue for recovery of the final premium, interest and additional damages. It is very important that companies seek legal representation after filing a lawsuit. 

When a matter is heard in court, many deadlines must be met in order to maintain a defense. If the company misses any of these deadlines, the court can declare the overage amount correct (even if it is wrong) and the company will pay the incorrect amount. Even if the deadline is met, you and your attorney will still need to gather evidence to support the lower and usually more accurate classification and resulting ruling. 

It is important to note which factors are used to determine premiums before and after testing. Companies need to keep in mind what kind of work each person does. In order to obtain or apply an accurate rate code, companies should retain as much information as possible to document the type of work performed by each person, including: Contracts with employees and independent contractors, payments made, invoices, work logs, time sheets and records of work performed. 

Keeping records helps prevent employees from being inadvertently assigned higher rate codes. In addition, if an employee is legally enrolled in separate employee compensation insurance, that employee should not be considered when determining premiums.

If the worker has separate insurance, the company will obtain a copy of the insurance card, verify its validity, and confirm that the insurance card was valid at the time the worker performed the work. is needed.

A copy of this certificate must be made during the workers' compensation audit. All of the above information must be kept as business records for an extended period of time to enable defense against improper workers' compensation audits and claims. 

Getting insurance may be easy, but understanding all the terms and conditions can be daunting. An insurance contract acts as a contract between a company and an insurer, and if the insurer concludes that it owes money or lacks the information provided, the insurer will maximize the profits of the company. do not take priority. 

Workers Compensation premiums are based in part on a worker's estimated wages (including bonuses, time off, leave, and sick pay), the worker's classification code, and uninsured subcontractor costs. At the end of the policy period, regardless of how the premium is paid, the insurance company conducts audits, including monthly reports. 

The audit verifies that salary estimates and classification codes when compensation was first quoted reflect actual salaries and the amount of work done during the period of coverage. Audits also check whether subcontractors have their own safeguards in place.  

Once the worker's compensation audit is complete, the insurer states whether the insured is obliged to pay additional premiums, whether the credit must be returned or applied to the next policy. We will send the final examination statement to the insured person. These credits or debits are typically due to salary adjustments made by auditors during year-end audits. In addition, changes may occur due to misclassification of employees.  

Keep Insurance Agent/Insurer Up to Date with Operational Changes

To avoid surprises and discrepancies when assessments are conducted at the end of the year, Prescient National advises its clients to notify their insurance agent of any operational changes that may affect workers' compensation premiums.

We recommend that you notify the store. Operational changes may include the opening or closing of new locations, which may result in an increase or decrease in salary, or the addition of new operations may result in a different company branch code. 

It is also important to classify employees correctly and notify insurance agents of job changes. For example, if an employee classified as a clerk is promoted to a traveling salesman, another classification will be made, which will affect workers' compensation. Make sure you're categorizing what people do and where they work. Split employee salaries by class code.  

Additionally, insurance agents and Prescient National underwriters are available to ensure that employees are properly classified. If your company employs subcontractors, keep each subcontractor's certificate of insurance for use during the annual audit.

If the insurance card is missing, the subcontractor's salary is included in the insured's salary. All overtime and double work must be properly accounted for on payroll. Ensure that these amounts are separately identified to the auditor.  

Insured persons should consider meeting with their insurance representatives quarterly to ensure that all records are correct and that there have been no changes in the company that could affect the audit. Prescient National conducts frequent interim reviews of new policies to ensure the accuracy of payroll calculations and classifications. 

Be Prepared the Day of the Audit

Payroll Records

Payroll journal and summary

Federal tax report: 941s, 1099s that cover the period

State unemployment tax reports

Cash Disbursement Records

Employee Records

Detailed explanation of job duties of each employee (if available)    

Number of hours, days, and weeks worked annually

Certificates of Insurance for all subcontractors and independent contractors used during the policy period

Detailed Description of Business Operations/Functions to justify Workers’ Compensation classification used

Based on its expertise, analysis, loss management, risk management and technology, Prescient National offers a variety of workers' compensation insurance products tailored to employer risk profiles and preferences.

One of the last email subjects I want to see in my inbox is COMENSATION REVIEW. Getting workers' compensation insurance is not an easy task. It is easy to make mistakes. Maybe you promised to change certain items on your payslip when you got home, but forgot about it. Overtime pay may not be accounted for. 

Whatever the reason, you don't want to end up paying high fees or customized insurance. In this post, I'll share three common mistakes companies make in the Workers Comp audit process and how to avoid them. Let's jump in! 

What is a Workers Comp Audit?

Like any year-end process, employee compensation audits can ensure that everything is done right in your small business. During the Workers Comp audit, the insurer verifies that payslips and other financial reports are accurate. 

Workers Compensation Insurance is a government-mandated program that allows workers who are injured or sick on the job to receive certain benefits. These benefits alleviate incapacity and may include wage replacement. 

Workers Compensation benefits businesses and employees because it waives the right to sue an employer for receipt of workers' compensation benefits. 

Complying with regulations can be difficult as you need to understand the laws of your state. Each state sets premiums based on economic prospects and the nature of the business. So where does Workers Comp audit matter? 

To avoid mistakes and stay compliant, you can rest easy by working with a payroll service provider. 

J&L Risk Managements puts you in touch with a trusted local agent who understands employee compensation, local regulations and coding systems inside and out. Our partnered providers can advise you on the best way to manage your workers' compensation insurance while finding the best premium for you. 

1. Misclassification of Employees

If you misclassify an employee, insurance companies can easily find out. In practice, workers who are at higher risk of being injured on the job pay higher premiums and, as a result, have higher insurance premiums. For example, a construction worker who regularly works on a construction site has a higher risk of injury than a data collector who sits at a desk most of the day. 

Having hundreds of vocational classes doesn't help. It's easy to make mistakes. Check the National Council on Compensation Insurance (NCCI) list to find the 4-digit code your business needs. Of course, with an NCCI class code, you'll pay more in insurance coverage if your workplace is more risky. This makes sense, because otherwise all companies would pay the same premium. 

Pro tip: 35 states use the NCCI Class Code List. Ten states use a modified class code list. Five states (California, Delaware, New Jersey, New York, Pennsylvania) use their own systems. See where the state is falling behind with this resource. 

Incorrect code can result in higher worker's compensation insurance payouts and penalties for underreporting risk. If Workers Comp audit reveals that you are using more secure code than necessary, you may be eligible for additional bounties for up to three years. 

2. Paperwork Errors

Spelling errors are often human errors. If your payslips are not organized and properly archived, you run the risk of not providing the information your insurer needs to ensure the best possible coverage. Insurance companies may think they are underestimating salaries in order to lower premiums. 

Workers compensation insurance is priced based on the number of employees, salary, claims history and level of risk associated with business operations. And of course, hiring new employees or increasing wages for top talent can change these metrics. 

In all cases, keep accurate records and notify your insurance company of any changes.

I am grateful that I can receive a salary when I join workers' compensation insurance for the first time. Insurance companies calculate premiums based on salary data. If your company's circumstances change, your provider will adjust the premium for workers' compensation assessments. 

3. Not Reporting Subcontractors

The lines can get blurry here. First, let's distinguish between independent contractors and subcontractors. 

Independent Contractor: Many independent contractors typically contract with their clients and have their own workers' compensation insurance to cover lost wages and medical expenses.

Subcontractor: You are hired by an independent contractor, but you must also write your own policy.  

For example, if you are an independent contractor and you hire an electrician to work on your latest project, that electrician is your subcontractor.  

Workers Comp Audits must ensure that contractors and subcontractors have their own insurance policies and valid policies to prove it. Uninsured employed workers are a premium-generating contribution. Try to use an insured subcontractor if possible.  

If the auditor employs an uninsured subcontractor, the company will be billed as if the subcontractor were a direct employee. After that, you will be charged a significant additional premium.  

How to Avoid Workers Comp Audit Mistakes

1. Always Be Prepared

Must be an active participant in the Workers Comp audit process. The more transparent you are with your provider, the smoother the process. Make sure you have all the documents you need in order to be compliant.  

This includes collecting information throughout the year, especially if we use contractors or subcontractors.  

Also, log whenever you change job descriptions or class codes. Your best bet is to contact your insurance company for advice. Again, transparency works wonders when it comes to building trust and avoiding nasty surprises during exams. 

2. Create a Workers Comp Audit Checklist

Creating a checklist to know what to change and what paperwork you need to prepare will give you peace of mind. Note the following points: 

Employee Information: It also includes forms and tax information.

Salary information: This includes your name, job title, wages, state in which you work, and more.

Certificate verification: To ensure that contractors and subcontractors are insured.

Description and class code: A detailed description of each business function and job function. 

3. Partner With a Payroll Provider

You can also cross all of the above off your worry list and ask your payroll service provider to guide you through an Workers Comp audit. Instead of worrying about record keeping and ensuring compliance, let your payroll service provider take care of it. 

ConnectPay connects you to local workers' compensation professionals who are familiar with state rules and regulations and can help classify your employees. We also recommend pay-as-you-go plans through our Connected Payroll model. If you're claiming Worker's Compensation, we'll put you in touch with an insurance company that can create a pay-as-you-go plan tailored to your needs so you don't have to overpay. 

Be Ready For a Workers Comp Audit

The best way to avoid mistakes is to be prepared and keep careful records. Tracking salaries helps you know when you need to make changes to your bonuses. 

Keeping accurate records and being transparent with insurance companies can help you avoid overpayments. You also want to prevent overpayments, as some money may come back. He could have used the money to pay off other debts or to grow his business. 

workers compensation audit can be cumbersome, costly and generally unpleasant. Most states require this type of testing, so avoiding it entirely isn't an option. However, with the right combination of planning and advice, you can avoid unexpected high bills and move forward on your path to long-term profitability. 

A workers compensation audit is performed for the simple reason that it allows insurance companies to prove that premiums paid for workers' compensation insurance are accurate. Reviewers typically assess the accuracy of risks, classification codes, experience modifiers, and reward amounts. In the event of discrepancies, the auditor will request an adjustment and will typically charge a premium within a very short time frame after the audit. 

This can make you seem like you are at a disadvantage. However, there are various strategies and tactics that can put you in an advantageous position. As with any contest, it all starts with preparation. 

Preparing for the Audit

Auditors conduct workers compensation audit in a variety of ways, depending on the level of risk, history with the client in question, and the results of previous audits. The three main types of workers compensation audits are post audits, telephone audits and on-site audits.

There are other types, such as midterms and preliminary exams, but they are less common. Audits are normally conducted within 60 days after the expiry of the previous period's policy. The insurer reserves the right to review such policies within three years after expiration, although this is less common than this 60-day review period. 

When contacted by auditors, it is essential to respond in a timely manner. A simple mail or phone audit is very easy and, when performed in a professional and timely manner, can show integrity in the carrier's eyes. On-site audits take more time to prepare for personal visits.

The biggest tip for a smooth exam is to prepare exactly what to expect when the proctor arrives. Be sure to ask the following questions during the planning process “What specific preparations should I make to ensure a smooth and timely inspection?” Carriers want the process to be as smooth and painless as possible, thereby saving customers time We are happy to provide this information because we are thinking about it. 

I once heard a story about an accountant who spent all day in a client's office. It tells me one thing: The client did not have the information the auditor needed and had to seek it out on site. This indicates a lack of organization and can negate the perception of the insured in the eyes of auditors representing the shipping company. 

Avoiding the Pain

Staying up-to-date with salary and employee classification changes throughout the year is critical to avoid the hassle of auditing large bills. It's also important to hire agents who understand how your business operates and how things can change throughout the year. Significant salary changes, class codes, and even projects not known or disclosed at the beginning of the contract period can cause an unpleasant experience at the annual review. 

Here's the problem: It's impossible to predict the future, but an inaccurate salary forecast can end up costing you a lot. For example, let's say you anticipate a $5 million salary, but you receive a large order in the middle of the year. To fulfill this contract, his salary would have to be increased to $7 million. Great news, right? You've had a successful year of him, so you're just getting bills for the difference from workers' compensation insurance. 

A $5 million commitment gives you a higher interest rate than $7 million. Why? Because the relationship between rating and exposure exists on a sliding scale. In this case, the fee will be higher, but he will pay $2 million as an additional commitment. Inaccurate projection can also cause burns along the way.

For example, if you expect a $5 million salary and only have $3 million on hand, most likely you won't get your money back on that promise. This is called audit up or workers compensation audit down. Testing is usually done. Getting audited and getting a refund is less common. 

Another issue for the insured is the division of wages. For example, if you have an office worker who is in the office 90% of the time but occasionally works in a warehouse to move and sort goods, the auditor may assign that person a higher percentage because of stress in the warehouse.

May be reclassified in this has two ways of dealing with this dilemma. You can (1) limit the employee to inefficient work or (2) intervene with the agent to negotiate with the shipping company. There is no guarantee that these negotiations will lead to positive results, but they are necessary steps. 

The same applies to drivers who load cargo or direct field operations. In some cases, a review may reveal that the classification has been incorrect for years and that the insured has been overbilled over a long period of time. The difference in cost per class code can be large. 

While it may not be possible to change payroll and HR responsibilities in advance, these costly problems can be avoided with relatively simple fixes. An experienced insurance partner. 

This person updates payslips and sales figures on a quarterly basis and analyzes potential classification problems. Margins are so thin in the energy industry right now that it's a step to separate a profitable year from a failing one. Expert opinion can also help you improve the efficiency of your business, supply base and operations. 

Having detailed discussions with insurance brokers when analyzing where we need to cut and how we can streamline or improve could provide a significant competitive advantage when oil prices rise and labor demand increases. Managing sales is the most important thing at this point, but there's nothing wrong with watching your bottom line. 

Proactive Measures

The ideal scenario from the insured's point of view is a 'proactive service calendar' with an agent. I cover this concept in more detail in my book Buying Insurance, but the general idea is: First, make sure you have a broker who understands your business and your plans for the next 12 months or more. 

This synergy allows brokers to determine the best possible results in terms of contact frequency. Rapidly growing businesses may need monthly checkpoints to add new locations, equipment, employees, etc., but most businesses will need quarterly checkpoints. A conference call is usually sufficient for this to work. However, as long as the insured person has time, there is no problem in meeting face-to-face. 

Question: Will you meet with your agent once a year for renewal and then receive an invoice from your agent? If yes, continue. Insurance is now a much more strategic tool and can play a key role in enhancing your bottom line. But insurance can also be a silent killer if left alone. Consider the following example. 

Many businesses in Houston and Florida did not have flood insurance. Why? Often it was just complacency. Her longtime broker didn't think strategically and only showed up when the deal was extended. This lack of preparedness was reversed after Hurricanes Harvey and Irma, showing how small annual investments could have avoided catastrophic costs. 

The same is true for workers compensation audit. Working with a broker as a strategic partner can help with the verification process and lead to significant savings. However, if the agent fails to track it, they may end up paying very high interest rates that are unexpected and completely avoidable. 

Final Thought

If you're a worker's compensation insurance payer, you know that aWorkers' Comp Audits can wake you up, especially if you're faced with a stifling bill. Unfortunately, there's no magic way to make an audit go to waste. But you can make it easier and less difficult. ‍Let's take a closer look at how to track employee compensation for successful Workers' Comp Audit. 

What Is a Workers’ Compensation Audit?

Before we help you review your insurance, it's important to understand what it's all about. If you are enrolled in worker's compensation insurance, you will be given an estimate of how much you will need to pay. Your reward is determined by:  

Employee wages, including bonuses and tips

Employee class code. A three- or four-digit number used by insurance companies to determine the risk of each job.

Class codes are set by a third party and in some cases may vary depending on your state and employee salary.

Uninsured independent contractor costs 

Your insurance company may require a worker's compensation audit to ensure the quote is correct. This check verifies that the premium quote meets the insurance coverage requirements.

Any discrepancy between the quoted amount and the amount you actually need means you are either paying too much or too little for your insurance coverage. In this case, the insurance company will request an adjustment of the premium. An adjustment means you have to pay more or less in premiums. 

If you overpay for workers' compensation (and the premiums were too high), you'll get your money back…in theory it's great (and definitely better than other options) , could have invested that money in his own insurance. Do business or pay off debt early this year. And if the premium is too low, you will be obligated to return it, but we all know that's not ideal.  

After completing the exam, you will receive a final exam bill. The audit report details the premiums owed to the insurance company (unpaid additional premiums) or reimbursements due to the insurance company (repaid premiums). Adjustments are typically caused by payroll errors or misclassification of an employee's work type or class code. 

Types of Workers’ Compensation Audit

Although all Workers' Comp Audits have the same goal - to make sure you're paying the right amount for your compensation - not all workers' compensation audits are created equal. The types of work-related injury assessments a company receives depend on the size and type of business, and the amount of insurance premiums. In general, there are four categories of occupational injury exams: physical examinations and voluntary exams. 

Phone audit: The insurance company will check your payslip and other relevant documents over the phone.

Email Audit: You will receive a verification form in the mail to verify your payslip and other relevant information, please fill it out and return it.

Physical examination- Larger companies with higher insurance premiums may require a physical examination. This means that premium Workers' Comp Audits are conducted at headquarters.

Voluntary audit– If you run a small business, your insurance company may only require a voluntary audit. In the case of voluntary inspection, the inspection form will be mailed from the insurance company. You must complete an audit form and provide supporting documentation.  

What an Insurance Company Looks for in a Workers’ Compensation Audit

So what are insurance companies looking for? As you might have guessed, to make sure the salaries and classification codes are correct. Some of the documents that insurance company auditors review and verify during Workers' Comp Audits are listed below. 

Payroll records such as payroll journals and summaries, overtime payments, IRS federal tax returns, state tax returns, and state unemployment tax reports

Insurance policies for subcontractors and contractors

Employee data such as Form 941, job responsibilities for each employee, hours worked and total number of employees

Payments to subcontractors, cash payments for materials and labor

Description of business  

Please note that the insurance company wants all these documents because they want to make sure the quote matches the actual payslip. This list also includes subcontractors. Insurance companies want to make sure you are actively insured. Otherwise, you may be charged additional insurance premiums for uninsured subcontractors. 

When Should You Expect a Workers’ Compensation Premium Audit?

Most states and the National Compensation Insurance Council (NCCI) require insurers to review most workers' compensation policies. When your workers' compensation insurance expires, your insurance company will notify you of an audit within 60 days. In most cases, your insurance company will notify you by email or phone.  

These checks are mandatory as part of workers compensation insurance. Just like filing tax returns or renewing your license, you need to be prepared for an insurance audit when your insurance period ends.  

Why Is it Important to Comply with the Workers’ Compensation Audit?

Industrial accident inspections are usually required by law, so it is in your best interest to act in the best possible way. Even if you've always wanted to kick and yell, of course, there are serious consequences if you don't comply. 

For example, insurance companies have a set period of time for executing checks. Failure to complete the review within this period may result in the cancellation of the insurance and the payment of an additional fee for uncooperative behavior. In some cases, additional charges can exceed the original estimate by 25-50 percent.

Non-compliance is also a red flag for future insurers. They see you as a risk, which can lead to higher rewards. 

Common Workers’ Comp Audit Pitfalls to Avoid

It's clear that following a workers' compensation compensation audit is extremely important to protect your wallet and your business. To keep things running smoothly, consider the six most common mistakes to avoid when auditing employee compensation. 

1. Incorrect Payroll Estimates

You want to make sure your salary estimate is as accurate as possible. Accurate estimates ensure a smooth audit process. It also helps you avoid expensive bills after the exam.

Work with a licensed insurance advisor who understands your business operations and is aware of the changes that may occur during your policy term. Transparency simplifies the review process.  

As an entrepreneur, you also need to ensure that your in-house payroll is consistent with your audited payroll. To do this, you must ensure that the information you provided to the examiner is correct and review the work of the examiner. 

Bonus Tip: An employee compensation platform like Hourly takes the guesswork out of it. Hourly ties salary data directly to employee compensation, so bonuses are always based on actual (rather than estimated) wages. 

2. Not Classifying Employees Correctly

The class code is used to calculate workers' compensation insurance premiums. Employees at high risk of injury at work are assigned a class code and rate that reflects their risk.  

Most states use class codes set by the National Compensation Insurance Council (NCCI). You can use this alphabetical list of her NCCI codes to find the correct class code for your employee. Some states have their own classification system for employee comparison codes (or use modified versions of the NCCI Employee Comparison Codes). Click here to see if your state is eligible. These bodies have the final say on correct classification. Always contact a qualified insurance advisor. This advisor will guide you through the process and help you figure out the correct class code for your team members.  

Incorrect job classification may require a lump sum payment at the end of the process with the exam invoice. Some employers in the construction industry are allowed to use a separate payroll for calculating insurance premiums. 

Separating salaries means that an employee's salary can be split between different class codes based on different job functions. For example, let's say you're a home builder and your employees are currently spending their time doing carpentry, pouring concrete, and installing drywall.

In this case, wages are spread across different tasks (for example, carpentry can earn $10,000, pouring concrete $8,000, and installing drywall $5,000). Workers Compensation benefits are based on these wages and their corresponding grade codes. This saves costs as employees are paid less for some tasks compared to others.  

Payroll segregation is a smart choice if you maintain accurate timekeeping and payroll and operate under NCCI conditions. You can always contact a certified insurance advisor if you have questions regarding a specific country. 

Bonus Tip: Hourly allows teams to change class code on the fly to suit the type of work they do. This will help avoid large charges due to incorrect class codes during Workers' Comp Audits. 

3. Failing to Include Deductions

Not everything on your payslip is taken into account when calculating workers' compensation premiums. For example, you can deduct part of your severance pay and overtime (if you're paying more overtime than you normally work). 

Bonus Tip: See your state's employee compensation regulations for a complete list of deductions that apply to your business. Common deductions include bonus payments, tips, employee benefits, and dismissal of officials. 

4. Paperwork Errors

Maintaining an organization is critical to a successful employee compensation audit. Streamline processes by organizing and archiving all payslips and other documents for the duration of the contract. Note that auditing requires the following items to be available:

‍Payroll records such as payroll journals and summaries, overtime payments, IRS federal tax returns, state tax returns, and state unemployment tax reports

Insurance policies for subcontractors and contractors

Employee data such as Form 941, job responsibilities for each employee, hours worked and total number of employees

Payments to subcontractors, cash payments for materials and labor

Description of busines

If you use a checkbook as your record keeping method, you may need to turn it over to your insurance company. But if you have another way to track your paycheck, you can keep it where it belongs: in your pocket.

Also, please include the overtime pay separately. Some insurance companies offer discounts on overtime premiums, so check to see if there are any discounts available.

Make sure all the information you have is true. Even if the mistake was an honest mistake, it could result in cancellation of your policy or a fine. And who would need such a headache again?

‍

Bonus Tip: As a best practice, we recommend creating a workers’ comp document checklist to prepare for an audit. Having the right document ready for your auditor helps ensure a speedy auditing process.

5. Not Confirming All Subcontractors and Contractor Have Certificates of Insurance 

A prerequisite for a premium audit is to prove that the subcontractor or contractor is insured. This is because insurers only want to cover their own employees, not contract employees.

If you do not have your insurance card and supporting documentation, your insurance company may charge you additional premiums for your coverage, which is undesirable.

Bonus Tip: Always check that the contractor's insurance certificate and insurance date match the date the contractor worked.

6. Not Checking State Requirements and Deductions

Unfortunately, workers' compensation insurance requirements and exclusions vary by state. A small business operating in one state shouldn't worry too much about changes in other states, but a multi-state business should. You cannot assume that the rules of one state apply to another state.

‍

Bonus Tip: If you have questions, please refer to your state's workers' compensation regulations or contact a qualified insurance advisor who can answer your questions.

Be Proactive with Your Workers’ Comp Audit

To ensure that the exam runs as smoothly as possible, please be proactive in the exam process.