Why Workers’ Comp Audits Matter
For contractors, workers’ compensation audits can be more than just paperwork, they’re often a source of stress, surprise bills, and administrative drag. When handled poorly, audits can disrupt cash flow, lead to unexpected costs, and expose compliance gaps that put your business at risk.
Audits are required by all carriers. But how they’re executed, and how much support you receive, varies drastically between public and private providers.
What Triggers a Workers’ Comp Audit
At the end of a policy year, your workers’ comp carrier compares estimated payroll (what you projected at the start) with actual payroll (what you really paid). If you paid more in wages or hired more workers than expected, you’ll owe additional premium. If you paid less, you may be owed a return.
This reconciliation process is called a premium audit. It’s unavoidable. But it doesn’t have to be painful.
The Problem with Public Carrier Audits
Contractors insured through public carriers, like the New York State Fund, often experience audits as delayed, manual, and difficult to manage.
Common problems include:
- Paper-based forms and limited digital access
- No real-time tracking throughout the policy year
- Surprise bills due to underreported payroll
- Minimal guidance for reporting subcontractor labor
- Delayed communication and long wait times for adjustments
For contractors working with variable crews, seasonal hiring, or 1099 labor, these gaps create real financial and operational risk.
How Insurance Companies Like Chubb and AmTrust Make Worker’s Comp Audits Easier
Private workers’ comp companies, including firms like Chubb and AmTrust, offer audit solutions built for real businesses not just regulatory compliance.
Here’s how they make the process smoother:
Pay-As-You-Owe (PAYO) Billing
PAYO integrates your payroll provider with your workers’ comp policy. As payroll is processed, premium is automatically calculated and adjusted in real time. No lump-sum bills. No catch-up charges. No surprises.
Supported payroll providers often include:
- QuickBooks
- Gusto
- ADP
- Paychex
Digital Payroll Sync
Instead of submitting forms and spreadsheets, your payroll data flows directly to the carrier. This eliminates manual entry errors and ensures your premium reflects actual wages paid not just estimates.
Subcontractor Classification Support
Private carriers help you distinguish between W-2s, 1099s, and insured subcontractors. This reduces audit disputes and helps you stay compliant with labor laws.
Audit Support and Guidance
During audit season, private carriers offer:
- Dedicated audit support reps
- Online document uploads
- Clear instructions on what’s required
- Timely responses and transparency
You’re not stuck waiting six months to find out what you owe.
Benefits for Artisan Contractors
Artisan contractors like plumbers, electricians, HVAC techs, framers, flooring crews, and others are uniquely impacted by audit complexity. These trades often have:
- Weekly or monthly crew changes
- Fluctuating payroll depending on project load
- Independent subs who rotate in and out of coverage
Without accurate payroll tracking and expert support, audits can go sideways fast.
Private carriers reduce this risk and help you stay focused on your projects, not your paperwork.
What Contractors Say After Switching
After moving from a public carrier to a private one, most contractors say:
- “I finally understand how my premium is calculated.”
- “No more audit surprises.”
- “It’s faster, cleaner, and easier to manage.”
- “They actually help when I have a question.”
If your current carrier isn’t supporting you during audits, you’re absorbing the risk and labor they should be handling.
How to Know If You’re Ready to Switch
You may be ready to move to a private carrier if:
- You’ve been with the state fund for more than three years
- You’ve had stable or improving loss history
- You use a payroll provider
- You’ve been surprised by an audit bill in the past
- You want more control and less guesswork
The shift doesn’t need to be complicated. At Refine Risk, we handle the review process and the transition so you can focus on running your business.
Get a Workers’ Comp Policy Built for Contractors
We specialize in helping contractors move from public carriers to tailored private coverage with better claims service, cleaner audits, and proactive risk support.