The audit is where estimated premium meets reality. Most unpleasant surprises are avoidable.
Workers compensation · Updated September 2026
Workers compensation and many general liability policies are priced on estimated payroll or revenue at the start of the term. At the end, the carrier audits the actual figures and issues either a bill or a refund. The audit is not an accusation; it is how the pricing model was always meant to work.
Audits may be conducted by mail, by phone or in person, depending on the size and class of the account.
Payroll records for the policy period, broken out by employee and by classification. Quarterly state and federal payroll tax filings, which the auditor will use to reconcile totals. A general ledger or profit and loss statement. A list of subcontractors with the amounts paid to each. Certificates of insurance for every one of those subcontractors. And a description of what your employees actually do, which is what supports the classifications.
Payments to a subcontractor who cannot produce evidence of their own workers compensation coverage are typically added to your payroll and rated at your class. On a year of heavy subcontracting, that single issue can produce an audit bill larger than the original premium.
The fix is unglamorous and completely effective: collect a certificate before the first payment, keep it on file, and get a new one when it expires.
In many jurisdictions the premium portion of overtime pay can be excluded if records separate it clearly. If your payroll system lumps overtime into gross wages, you may be paying premium on the extra half. Similar rules can apply to certain bonuses, severance and tips, and the details vary by state.
Ask for the auditor's worksheet and check it line by line: payroll figures, classifications, subcontractor treatment and any estimated amounts used where records were missing. Errors happen, and carriers will revise an audit when the records support it. Raise the issue promptly, since there are deadlines.
We want clients ready before the auditor calls, so we explain up front what records the carrier is likely to request: payroll reports, employee classifications, owner and officer information, subcontractor payments and certificates of insurance.
If an audit produces an unexpected charge, we help you understand why the premium changed and review the result for anything that needs clarification or correction, and we will help put questions and supporting documentation in front of the carrier. We cannot promise every audit charge can be changed, but legitimate discrepancies are worth raising.
Questions about your own situation? Call 417.623.8300 or send us your current policy. We are licensed in Missouri, Kansas and Oklahoma.
Questions about your own policy? Send it over and we will go through it with you.