| All building contractors working in North Carolina | | | | Tip #3 - Have The Audit Done and Ready To |
| who carry either a NC general liability insurance | | | | Hand Over. Once you have done your homework |
| policy or a NC workers compensation insurance | | | | on your classifications, set up a spreadsheet to |
| policy, or both, probably know that these | | | | dump the payroll for each employee each week |
| insurance policies are subject to an annual audit. | | | | into the correct classification. You will want to |
| What few contractors understand is that they | | | | keep a spreadsheet for both the workers |
| have the power to stack the deck in their favor | | | | compensation and the general liability policies. If |
| when it comes to that audit. And since some of | | | | you have done this correctly, you will be able to |
| the audit process is subjective, this can mean | | | | hand that spreadsheet over to the auditor and |
| money in your pocket if you are a building | | | | essentially all of the auditor's work is done. This is |
| contractor. Here are 5 tips that will put you on | | | | more likely to keep them from digging around in |
| the road to more successful insurance audits. | | | | your books to find new problems to share with |
| Let me start by emphasizing that insurance | | | | the underwriters that can cost you in increased |
| auditors are people just like any other. If you | | | | premiums. |
| grease the path for them and make their job | | | | Tip #4 - Keep The Overtime Payroll Separate. |
| easier, then they are much more likely to cut you | | | | The NC workers compensation insurance policy |
| some slack in the audit process and this can end | | | | allows you to avoid paying premiums on the extra |
| up saving you a lot of money. So, what are those | | | | overtime pay. But, to keep from paying work |
| 5 tips? | | | | comp rates on this payroll, you must have it |
| Tip # 1 - Have Those Insurance Certificates | | | | segregated. I suggest that you add a column on |
| Ready. I just can't preach this enough. Do not | | | | the work comp spreadsheet that you are keeping |
| allow any subcontractors on to your job site until | | | | to show the amount of payroll that is overtime |
| they have provided you with a current certificate | | | | bonus and deduct it from the total payroll for |
| of insurance. And more than that, be sure that | | | | each classification. |
| the limits on their general liability insurance policy | | | | Tip #5 - Always Schedule the Audit for Friday |
| are at least equal to your own policy limits. And if | | | | Afternoons. This one may sound a little goofy but |
| you have a workers compensation policy, make | | | | it works. If the auditor shows up at your office |
| sure that their certificate shows that they have | | | | on Friday afternoon, and you can put all the |
| one as well. Last of all, check the policy dates on | | | | information in his hands with up to date |
| the certificate to be sure that they are current | | | | spreadsheets and copies of all subcontractor |
| and active. If any policies will run out while these | | | | certificates, then he is more likely to accept your |
| subs are still on the job, make sure that you also | | | | figures and get on home for the weekend. The |
| obtain an updated certificate. Put copies of all of | | | | less time he spends digging around in your books |
| these certs in your audit file. If the auditor shows | | | | and your operations, the less likely he is to find a |
| up at your office and you don't have your certs | | | | surprise that the underwriter doesn't like which |
| ready, he will charge you for the subcontractor | | | | means higher insurance costs for you. |
| payroll and leave it up to you to fix it later. And | | | | Most building contractors have a vague idea of |
| usually, fixing it later takes a lot more of your | | | | when their audit is coming up and some even |
| time. | | | | have a general idea of whether they should be |
| Tip #2 - Take Some Time To Study Your | | | | expecting a refund or an additional premium due |
| Classifications. First of all, take the time with your | | | | after the audit. But those that prepare carefully |
| agent to understand all of the classifications on | | | | for the audit process, can turn it to their |
| your general liability insurance policy and your | | | | advantage to reduce their overall insurance costs |
| workers compensation insurance policy. Make sure | | | | and have their own cross check against the |
| that you understand the nuances of each class | | | | insurance company's audit report. Don't let the |
| code and that your policy is set up accurately. If | | | | insurance company sweep you along; be actively |
| you are going to fudge the gray area between | | | | engaged in the audit process by being prepared |
| two similar classifications, understand that you | | | | and proactive. In the long run, this will save you |
| might not get it past the auditor and you should | | | | money on your insurance costs. |
| have funds ready should you fail. | | | | |