Insurance Audits

Audits are performed to ensure that the premiums employers pay for workers' compensation insurance accurately reflect their risks. Insurers check to make sure that employers are properly classified and that the payrolls used for rating purposes are accurate.

It’s an unfortunate fact that injuries sometimes occur at work. To help manage this, the Bureau of Workers’ Compensation administers the Tennessee Workers’ Compensation Act. This act helps employees and employers to minimize the impact of work-related injuries.

Certain employers must provide compensation insurance benefits and the premium to be paid is calculated through a formula based on the company payroll. If your payroll information is not up to date (or worse, incorrectly recorded) the premium calculation will be invalid. It’s vitally important to get this information correct and current, as failure to do so could lead to invalidated insurance.

The requirement for this insurance may be in place even if you have just a single employee or work with independent contractors. The regulations are changing constantly to better serve the people affected, and so it is wise to take nothing for granted.

At Paz Tax, we can ensure that you are complying with all the relevant laws and requirements as well as having an accurate payroll to base any calculations on. You can rest easy knowing that everything is taken care of and you have fulfilled all the requirements expected of you by law. Your employees will be thankful that everything is in order, and your business can grow on a strong foundation of compliance.

Let us help you accurately comply with your insurance audit. Below is a list of documentation we need from you.

What You Need for Your Audit

Audit Notice Payroll Records Employee Records Payments and Cash Disbursements Records Certificates of Insurance (COI)

Audit Notice

Your insurance will send you an audit notice, which will include important information regarding your audit and policy, such as the policy period and policy number.

Payroll Records

Payroll journal and summary
Your check book (if it's your only means of keeping records
Federal Tax Report- 941's that cover the period
State Unemployment Tax reports or individual earnings records
All overtime payroll records

Employee Records

Detailed explanation of job duties of each employee (if available)
Number of hours, days, and weeks worked annually

Payments and Cash Disbursements Records

Payments to sub-contractors (including cash)
Material purchases
Casual labor payments

Certificates of Insurance (COI)

For all sub-contractors used during the policy period
May need two COIs from each subcontractor; this will verify coverage existed during payer's policy period.

Check subcontractor Coverage Verification and Track Policy to instantly get notified when they lose coverage.

Payroll is a major component of an insurance audit, and including all your employees with all the correct information is important.

Don’t have payroll records?
Let us help you get your books up to date for the audit and have them ready for tax time.