If you carry workers’ compensation insurance for your Missouri business, one essential part of maintaining that coverage is a workers’ compensation audit. These audits ensure you’re paying the correct premium based on your actual payroll, employee classifications, and business exposure — and help protect both you and your employees. Understanding how audits work can save your business from surprises and non-compliance penalties.
What Is a Workers’ Compensation Audit?
A workers’ compensation audit is essentially a review of your business records to confirm that the payroll and classification information you reported at the beginning of your policy term was accurate. Insurance companies estimate premiums when your policy begins, but an audit checks whether those estimates match what really happened during the policy period.
Audits can be conducted:
- In person at your business
- By mail or online portal
- Over the phone or through uploaded documents
This process ensures your premium is fair — you pay more if you underreported payroll or risk exposure, or you may receive a credit if you overpaid.
How Often Do Workers’ Comp Audits Occur?
In most cases, audits happen once a year after the policy period ends. This is industry standard because payroll and exposure data change over time, and insurers need up-to-date information to calculate the correct earned premium.
In some situations:
- Insurers may conduct mid-term or special audits
- Businesses with fluctuating payroll or subcontractor usage may be audited more frequently
- National Council on Compensation Insurance (NCCI) guidelines influence audit timing and compliance rules
Not complying with an audit request can result in an audit non-compliance charge or even cancellation of coverage until the audit is completed.
Are Workers’ Comp Audits Necessary?
Yes — audits are not optional if your insurer requests one. They are part of how insurance carriers make sure the premium you paid reflects your actual risk.
Why audits are necessary:
- To verify actual payroll and job classifications
- To include any subcontractors or leased workers where applicable
- To adjust your premium based on real data instead of estimates
- To ensure compliance with insurance and rating bureau requirements
Without an audit:
- Your coverage could be canceled
- You could face financial penalties
- Your business may be charged extra for underreported exposures
What Information Is Typically Needed for a Workers’ Comp Audit?
To complete an audit smoothly, employers should be prepared with documentation related to:
1. Payroll Records
Auditors look at:
- Quarterly tax forms such as IRS Form 941, W-2s, and other payroll reports
- Payroll summaries broken down by employee and job classification
- Overtime, bonuses, and contract labor pay
2. Subcontractor Insurance Information
If you used subcontractors during the policy period:
- Provide Certificates of Insurance (COIs) showing they have their own workers’ comp coverage
- If subcontractors are uninsured, their payroll may be added to your payroll for premium purposes
3. Job Descriptions and Classification
Auditors need to confirm that workers are correctly classified (e.g., clerical vs. manual labor), because classification affects your premium. Provide:
- Detailed job descriptions
- Organizational charts if applicable
4. Financial Records
Useful financial documents include:
- General ledger or payroll journals
- Federal tax returns
- Profit and loss statements (if applicable)
The exact list can vary by insurer, but keeping accurate records throughout the year will make audits faster and less stressful.
What Documents Are Required for a Workers’ Comp Audit?
When preparing for a workers’ compensation audit, insurers will request specific documentation to verify payroll, classifications, and subcontractor exposure. According to The Hartford, some of the most commonly requested items include payroll records, tax forms, and certificates of insurance for every subcontractor used during the policy period.
You can review a detailed breakdown of what insurers typically require during a workers’ compensation audit here:
👉 https://www.thehartford.com/workers-compensation/audit
Keeping these records organized throughout the year can help prevent premium surprises, audit delays, and disputes over classification or subcontractor exposure.
Tips for a Smooth Workers’ Comp Audit
- Organize your records before the policy period ends
- Respond promptly when your insurance carrier requests audit information
- Communicate clearly with your agent or auditor
- Review subcontractor insurance certificates regularly
- Update job classification data whenever roles change
Good recordkeeping not only makes audits easier but also helps ensure your business pays a fair premium based on actual exposures.
Missouri Employers: What You Should Know
Missouri law generally requires employers with five or more employees to carry workers’ compensation insurance — and this applies to many businesses across industries.
Whether you are a new policyholder or renewing coverage, workers’ comp audits are part of maintaining compliance and ensuring your insurance costs are accurate.
Need Help With Your Workers’ Compensation Insurance?
Workers’ compensation is just one aspect of business risk coverage. Depending on your operations and vehicle use, you may also need other types of insurance — like commercial auto or motorcycle coverage for business vehicles. If you want help reviewing your business insurance needs, including workers’ comp and other policies, we can guide you.
👉 Get help and learn more here: https://www.millenniumbrokers.com/workcomp/
Bottom Line
Workers’ compensation audits are a standard, necessary practice for Missouri employers. These audits help ensure your premium reflects your actual payroll, job classifications, and subcontractor usage. Being prepared with the right records and documentation makes audits smoother and helps your business stay compliant.
If you need help preparing for an audit or reviewing your workers’ compensation policy, MBG Insurance is here to help.
Workers’ compensation audits are a standard part of how policies are priced. Your premium is based on estimated payroll at the start of the policy, and the audit verifies what actually occurred during the policy period. Completing the audit allows the insurer to calculate your final, accurate premium.
If you do not complete a requested audit, insurers may:
Estimate your payroll at a much higher amount
Apply non-compliance penalties
Issue a large additional premium bill
Cancel or non-renew your workers’ compensation policy
In Missouri, refusing or ignoring an audit can also make it harder to obtain workers’ compensation coverage in the future.
Best practice:
Respond promptly to audit requests and provide accurate payroll, classification, and subcontractor information. If something doesn’t look right, work with your insurance agent to correct it before the audit is finalized.
If you need help preparing for or reviewing a workers’ compensation audit, MBG Insurance can guide you through the process and help prevent costly surprises.