Many rules are overlooked or ignored on a regular basis. Unless your records are maintained
according to the rules, you may be paying an inflated premium. Since the rules
often vary from state to state, access to the NCCI Basic and Experience Rating Manuals is
necessary. For example, some states exclude vacation and holiday pay, others do not. Some
exclude premium overtime, others do not. There are several independent bureau states that
don’t even follow the NCCI rules. You need to be sure to take advantage of every favorable
rule in order to minimize your workers compensation premiums.
Most businesses never see these rules, and do not know that there are many cost saving
strategies available for those who know the loopholes. Think about this- when, if ever,
did an insurance company auditor sit down with you, open their manuals, and describe
steps to help minimize your premiums to their lowest level? When was the last time anyone
from the insurance company voluntarily searched for mistakes and overcharges going back several
years? Never, most likely.
One of the most common statements we hear is that your premium was reviewed by your agent or broker,
and they found no errors. If that were true, we would be out of business because all of our clients
have agents or brokers, and we work on a contingency basis. If mistakes were not made, we would not
get paid. Overcharges are common. Agents and brokers do not specialize in reducing premiums; they
concentrate on providing coverage and are paid commissions by insurance companies for doing so.
Honest errors and mistakes create higher premiums, as well as higher commissions.
You are entitled to a copy of the auditor's worksheets used to determine
the final premium. Copies are available from your insurance carrier,
and you should always review them. The audit is requested, conducted,
and reviewed by the insurance company. And, don't think just because
you got a refund (or paid a small additional premium) the audit is correct.
The Workers Compensation Manual provides the rules and interpretations
for Basic and State Special Classifications. Most businesses never see these
rules, and do not know that there are many cost saving strategies available
for those who know the loopholes.
Audits are often questioned or disputed by contacting the carrier directly.
Since this is routine business for the insurance company, they know
how to "throw rules at you." Unfortunately, they often neglect to reveal
the entire rule. We have been engaged in premium auditing since 1978 and will
be your advocate.
Most businesses receive a free copy of their experience rating worksheet
from the NCCI or an independent rating bureau each year. The calculation
is based on information supplied by your previous insurance carriers,
and can be erroneous or missing key data. One percentage point can make
Construction companies often hire us because a higher mod factor can exclude
them from being hired by a general contractor or bidding on a new project. If
your experience modifier must be below 1.00, we can help you achieve this goal.