Why Workers’ Compensation Audits Matter More Than You Think

Workers’ compensation audits are a critical part of your business insurance program, yet they’re often misunderstood or overlooked until the end of the policy term. Many business owners view audits as a simple payroll reconciliation, but they actually play a major role in ensuring your coverage and premiums accurately reflect how your business operates.

As businesses grow and change, payroll fluctuates, employees take on new responsibilities, and operations evolve. If these changes aren’t properly tracked and communicated, audits can uncover discrepancies that lead to unexpected premium adjustments or coverage concerns.

Not sure if your workers’ compensation policy is keeping up with your business?
Get a quote with LG Insurance Agency to review your coverage before audit season begins.

Common Issues Found During Workers’ Comp Audits

Over the course of a policy year, several factors can trigger audit discrepancies. Some of the most common issues we see include:

• Misclassified employees or incorrect class codes

• Changes in job duties that weren’t reported during the policy term

• Payroll increases or decreases not reflected in the policy

• Subcontractors without proper certificates of insurance

• Incomplete or inconsistent payroll records

These issues can result in surprise bills, delayed audits, or disputes that take time and energy away from running your business.

How Accurate Audits Protect Your Business

Workers’ compensation audits protect both carriers and business owners. For carriers, audits ensure premiums align with actual risk exposure. For business owners, they help confirm you’re paying the correct premium and that your coverage will respond properly if a claim occurs.

An inaccurate classification may not seem like a big issue—until a claim is filed. At that point, discrepancies can lead to coverage complications, increased costs, or unnecessary delays.

LG Insurance Agency’s Proactive Approach to Workers’ Comp

At LG Insurance Agency, we believe audits should never be a surprise. Our team takes a proactive approach by working with clients throughout the policy year—not just at renewal or audit time.

We regularly review payroll changes, employee duties, and operational shifts to help ensure policies remain accurate as your business evolves. This ongoing communication helps make the audit process smoother, faster, and far less stressful.

Preparing for a Smooth Audit

Preparation is key to a successful workers’ compensation audit. Maintaining organized payroll records, clearly defined job descriptions, and proper documentation for subcontractors can make a significant difference.

Our team helps clients understand what carriers are looking for and how to prepare ahead of time. If questions or issues arise during the audit, we advocate on your behalf to ensure classifications are applied fairly and accurately.

Turning Audits Into a Tool, Not a Surprise

Workers’ compensation audits aren’t about catching mistakes—they’re about accuracy, transparency, and protecting your business. When managed correctly, audits become a valuable tool for confirming your coverage aligns with your operations and risk profile.

If you have an upcoming workers’ compensation audit, received an unexpected audit bill, or want to ensure your policy is structured properly, LG Insurance Agency is here to help.

Schedule a workers’ compensation policy review with LG Insurance Agency and take the guesswork out of the audit process.