Workers’ compensation insurance is complicated. It is easy to make mistakes with a system that involves hundreds of regulations and classifications.

On top of that, workers’ compensation insurance companies (as all insurance companies) are in business to make money.

They do not frequently audit your workers’ compensation claims or their systems of calculating and classifying in order to save your business money.

It does not bother them if you are paying them more than you need to be paying them.

Insurance agents are human, and as such they make mistakes. Here are some of the top mistakes workers’ compensation insurance companies make.

• Workers’ compensation insurance companies often do not report to NCCI reimbursements they receive from the Second Injury Fund. This causes employers' experience modification factors to be inflated, which causes employers to be overcharged for their workers’ comp insurance. (This was a huge issue in South Carolina last year.)

• Sometimes workers are given the wrong job classification codes workers’ compensation classification codes. When workers are given a higher classification code than needed, their insurance premiums go up. This cost falls completely on the business owner.

• It is possible that the business owner's experience modification was miscalculated. The higher the experience rating, the lower the insurance cost should be for workers’ compensation.Similarly, if your company’s experience rating goes up during the policy period, your workers’ compensation insurance costs should go down. If they do not, you could be eligible for a refund.

• Because saving the customer money isn’t high on the insurance company’s to-do list, eligible credits and discounts are either misapplied or never applied.

• The insurance agent may make a mistake with the way he calculates payroll charges. Or, if the cycle during which you estimate payroll and calculate actual payroll is off, it could be costing you extras in your insurance premiums and increasing your workers’ compensation costs.

For these reasons, it is always a good idea to hiring an independent company to conduct a workers’ compensation audit on your insurance policies and methodologies.

Most companies can save your business an average of 10 to 15 percent of their workers’ compensation insurance premiums. The best part is that these auditing companies do not charge you anything unless they are able to recover your overcharges.

If you do not have time to conduct your own audits, consult a professional.

Click Here for More Information