An abstract image representing a screen with security padlocks on it. Most padlocks are closed and show as blue, representing a secure system. Except one which is open and shows in red, representing an insecure system, breach or intrusion. The image symbolizes an attempt at intrusion on a secure system grid.In this ever-changing world, new threats and risks surface seemingly every day. Can you guess what one of the biggest threats to your business is? It’s not looting, and definitely not slander, it’s Cyber Breach! Years ago, a big topic was identity theft, and people having their credit cards compromised. As those issues are still common today, there is a much larger issue at hand. If a company has a breach, millions of customers could be at risk instantly, whereas before, people had their private information breached one by one. Can we go back to the old days?

Companies have begun investing heavily in security and creating in-house security teams to protect themselves from having their private information hacked. With millions of people affected by cyber breach across the world, it has become a common issue for businesses. According to Forbes, in 2019, personal account information surfaced on the dark web resulting from the data breach of Facebook and Instagram, exposing over 400 million user’s personal information.

How do I know if my business is at risk?

Many people think that a cyber breach can only affect businesses that have online stores, or sell a product or service through a website, however, that is not the case. Your business is at risk if it handles sensitive computer data such as credit card information and bank account numbers. Whether online, or in a computer system, information just isn’t safe anymore. Hackers are able to bypass security software and can get into your company’s servers to access all the information they want, at times getting through the best security available.

Unfortunately, these days having the best security software and team cannot guarantee the safety of your business. Although they are good investments to have, because they can make it quite difficult for a hacker which may make your company less of a target.

How will it affect my business?

A breach can cause an extensive threat to your financial stability. No matter the size of your business, federal law now requires you to notify every one of your customers affected by the breach. You may need to pay for extensive damages across your business. If you are one of the companies that has their business breached it may be necessary to hire a PR firm for damage control, forensic services to find out the extent of the breach and make the necessary security changes, legal services to protect you from individual and class action lawsuits, etc.

Hackers can also gain access to your employee’s information through email, and begin to contact others through that email address. This can create a massive headache for your company. Imagine an executive asking someone within the company for money in an emergency situation. Before you know it, your company just lost tens of thousands of dollars. It is critical to define certain protocols that offer an additional layer of protection. Requests for money transfers should be approved by more than one person and confirmation should be done in a secure manner or in person if possible.

How can I protect my business?

Until a few years ago, there was no insurance available to cover cyber liability. Businesses used Commercial General Liability Insurance to obtain coverage for bodily injury and property damage from accidents on their property or in their business, yet this does not protect them from any of the financial losses that can happen from failure to protect the private information of its customers.

Insurance companies now offer stand-alone policies to protect your business from many of the financial pitfalls that were stated earlier, that come with a cyber breach. Prices for these policies vary. Considering what they are protecting, it is well worth looking into the coverage. The application process can be quite simple depending on the need. Because the insurance company must know many details about spy ware protection, internet usage, etc. it is a good idea to work with your IT team when shopping for Cyber Liability coverage.

If you own a business, and are looking for protection against a cyber breach, MHG Insurance Brokers would be happy to assist you. Also, if you are looking to purchase other various forms of Property & Casualty Insurance such as General Liability or Professional Liability, our insurance specialists have the experience to assist your business and offer advice in finding the perfect plan to fit all of its needs. Contact MHG Insurance Brokers today at +1 954-828-1819 or +44 (0) 1624 678668 or visit us online at mhginsurance.com.

Can you guess what one of the biggest threats to your business is? It’s not looting, and definitely not slander, it’s Cyber Breach!

Buying Insurance 101

Young couple shaking hands with a female agentBuying insurance, no matter what type, can be an intimidating and daunting task. For one, there is a ton of tricky lingo, a plethora of different coverages amounts and types, and of course the cost. Unless you are someone who works in the insurance industry, chances are insurance lingo can sometimes sound like a different language, and confusing protocol leaving you wondering what to do next.

However, it doesn’t have to be this way! Follow these 5 easy steps when making any insurance purchasing decision to help ease your mind and make the process as smooth and simple as possible.

What am I trying to protect?

When buying insurance, the first thing you need to ask yourself is “What am I trying to protect?” Are you trying to protect your business? Your health? Your kids? Your assets?

Once you have the answer to that question it will narrow down what you should be looking for. For insurance, If you wanted to protect your business, you would want to consider a General Liability policy, or Marine General Liability depending on the business. Protecting your kids? Look into life insurance.

What is my budget?

Once you know what type of insurance product you are in the market for, next you need to figure out your budget. After all, you don’t want to lapse your policy because you can’t afford it down the line if things become tight down the road, so be smart. Depending on your situation and what you are trying to insure, sit down and figure out what you can realistically afford, and what level of priority is the type of insurance you need.

Who do I know?

One thing that can make the decision easier is to figure out if you know anyone that currently has what are looking to get. If you do, ask them about it. What are the pros and cons? Is there anything they would do differently? Is there anything you need to look out for?

What don’t I know?

As with anything you buy, you should always do your own research. Figure out what products are out there, what pitfalls there are, and anything else that will help you get the best out of what you are buying.

Seek out a reputable broker!

Insurance Brokers often get a bad reputation but using a broker can help you avoid situations like this. For one, the majority of brokers are well-versed with the ins and outs of the insurance industry and can help you avoid a negative trend that you may otherwise know nothing about. Not to mention, brokers work for you! Brokers typically operate at no extra cost to you as it would be if you went straight to the insurance company to get your plan. If you would like to learn more details of using an insurance broker, read our previous blog, “Why You Should Use an Insurance Broker”.

Having proper insurance is important whether you are looking to protect your business, your loved ones, or yourself! Our insurance specialists have the knowledge and experience to find the type of insurance you are in search of, and policy that works best for you and your budget. If you are interested in purchasing, or have any questions about marine crew insurance, life & health insurance, travel insurance, expatriate insurance, property & casualty insurance, or ocean marine insurance, please contact us at +1 954 828 1819 or +44 (0) 1624 678668 or visit us online at mhginsurance.com.

Follow these 5 easy steps when making any insurance purchasing decision to help ease your mind and make the process as smooth and simple as possible.

Shot of a couple looking stressed out while working on their finances at homeThe promise of an amazing benefit is great, but what happens when you try to use that benefit and experience resistance? That seems to be happening more and more when it comes to low-cost insurance plans. When buying insurance, a person is buying an intangible promise. With that mindset, one can see why low-cost insurance is rarely ever low-cost.

Can’t Have Good, Quick, and Cheap

Ever hear the saying you can’t have your cake and eat it to? Typically, with anything in life, you get what you pay for. Consumers are constantly trying to save money any way they can on products or services they buy. However, depending on the product or service, a good “deal” can quickly turn into an absolute nightmare. Low-cost insurance plans are no different. Consumers can expect to receive delayed quotes, slow service, claims issues, and that’s just the tip of the iceberg.

You’ll Pay for It Later

Saving money on premium doesn’t always mean that you’re saving money overall! Many times, those who opt for cheaper insurance end up paying more in the long run because of a lack of coverage that was unknown to them when trying to use their insurance, or even worse, no coverage at all. Imagine being involved in an emergency situation that ends up with you being in the hospital, the last thing you want to be worrying about in that moment is being stuck with the entire hospital bill which could end up being tens of thousands of dollars.

Possibility of No Service

One trend that has popped up as of late are insurance companies offering cheap plans to grow their business. However, businesses can’t afford to continue to operate on low margins, so the customers are the ones who end up suffering. Having a plan with great benefits, but no service when actually trying to use it results in disappointment for the consumer.

Consumers vs. Insurance Companies

Insurance companies are usually very large, so going toe to toe with one is no easy task if you have a dispute with the plan that you have purchased. Even if the consumer is completely in the right about a particular claim or situation, the costs and time involved can be substantial. It is for this reason that you really need to do your research and choose the best plan for your needs, not just the cheapest.

Use a Broker!

Insurance Brokers often get a bad reputation but using a broker can help you avoid situations like this. For one, the majority of brokers are well-versed with the ins and outs of the insurance industry and can help you avoid a negative trend that you may otherwise know nothing about. Not to mention, brokers work for you! Brokers typically operate at no extra cost to you as it would be if you went straight to the insurance company to get your plan. If you would like to learn more details of using an insurance broker, read our previous blog, “Why You Should Use an Insurance Broker”.

Having proper insurance is important in every aspect of life. Whether you are at sea needing international coverage, looking for proper life insurance coverage, going on a vacation, etc. MHG is your specialized broker. Our insurance specialists have the knowledge and experience to find the policy that works best for you. If you are interested in purchasing, or have any questions about marine crew insurance, travel insurance, U.S. life and health, expatriate insurance, or property and casualty, please contact us at +1 954 828 1819 or +44 (0) 1624 678668 or visit us online at mhginsurance.com.

When buying insurance, a person is buying an intangible promise. With that mindset, one can see why low-cost insurance is rarely ever low-cost.

MarineWelderCommercial General Liability insurance is designed to cover land-based operations. Typically, there is an exclusion in most CGL policies for any work done onboard ship, docks, or piers. The reason for this exclusion is that marine risks are better suited for a Marine General Liability policy. One major area of concern for a marine risk is the coverage for care, custody, and control. This coverage is critical for ship repairers especially and is a standard coverage on an MGL policy.

A Look Back

A General Liability policy doesn’t include watercraft coverage; including the ownership, maintenance, and use of watercraft owned by you, the insured. The client, shipyard or vessel may never know all these exclusion by just looking at a certificate of insurance. The forms and endorsements are included in the policy wording- which brings up the fact that an experienced insurance broker could help you when it comes to the specifics of policy exclusions and/or benefits.

Commercial General Liability

Commercial General Liability policies protect business owners against claims of liability for bodily injury, property damage, and personal and advertising injury (slander and false advertising). Premises/operations coverage pays for bodily injury or property damage that occurs on your premises or as a result of your business operations. Products/completed operations coverage pays for bodily injury and property damage that occurs away from your business premises and is caused by your products or completed work.

Marine General Liability

Marine General Liability policies are designed specifically for those who work on vessels, docks, and ports. These policies include coverage for Marine Contractors, ship repairers, and others who work on or near water.

Why didn’t I Know about This?

Often, contractors that perform work such as carpentry or welding will be asked to do work on a ship or in a port. Their normal operations are on land and they carry CGL coverage. Many do not realize that their current policy will not cover them for work done on a vessel or on a dock. Most shipyards, vessels, and ports don’t check the coverages listed on a certificate of insurance provided by the contractor, they may let them work with improper coverages, not knowing the exclusions that the contractors have in their policies. This is where the problem arises, since they may not be covered in the event of a loss or accident.

Why aren’t Marine Contractors Covered?

Commercial General Liability policies are not designed to cover marine operations. In order to offer coverage for a risk, the underwriter needs to understand the operation. Class codes are used as a way for an underwriter to rate a risk and determine the premium paid. Class codes are also a way for an insurance company to decide what types of business they want to insure. It is important that the company that insures your business understands exactly what you do and how you do it. Otherwise, you may be paying for a policy that will not cover a loss specific to your business. Marine businesses are best insured by a marine underwriter with an insurance company that is familiar with the marine industries.

Working with an expert insurance broker, like the brokers at MHG Insurance Brokers, can help you obtain a policy that specifically addresses your needs and is customized to your benefit. Remember, cruise lines and marinas require proof of appropriate insurance coverage before any job can begin, so make sure you have the right policy in hand. To learn more about the advantages of Marine General Liability coverage, contact an MHG broker today by visiting mhginsurance.com or calling 954-828-1819.

Typically, there is an exclusion in most CGL policies for any work done onboard ship, docks, or piers. Read to learn more!

Why Business Owners Should Consider an Employment Practices Liability Insurance PolicyIn today’s increasingly litigious society, business owners operate under the constant threat of lawsuits from employees, on a variety of issues. The proliferation of federal, state, and local employment laws has created a plethora of exposures that can leave your business vulnerable to costly litigation. Businesses of all sizes are at risk: whether you are the head of a large corporation or the owner of a small neighborhood company, once you hire your first employee, you expose your company to the possibility of a lawsuit.

An Employment Practices Liability Insurance Policy provides necessary protection for your business.

Employment Practices Liability Insurance (EPLI) protects your business, its directors, officers, and employees, providing coverage for the legal costs and damages associated with claims by current, former, and potential employees for a number of employment-related allegations, including:

  • Wrongful dismissal
  • Sexual harassment
  • Hostile work environment
  • Invasion of privacy
  • Denial of promotion
  • Failure to make partner
  • Age, race, gender, or sexual orientation discrimination
  • Failure to accommodate the needs of the disabled

The number of employment related lawsuits filed each year is rising.

Cases against employers are on the rise. According to the best industry estimate, 3 out of 5 businesses will be sued by an employee. Companies are now vulnerable from the first contact with a potential employee, from the pre-hiring process through the exit interview, even if the potential employee was never hired or was only with the company for a few days.

A single employee can sink your entire company.

No matter how vigilant you are, you cannot monitor every hire, termination, and conversation that takes place in your offices. Any misbehavior by your employees - a careless remark, inappropriate joke, or slightly mishandled termination – can be the basis of a lawsuit with the potential to bankrupt your business. There are steps you can take to minimize exposure, such as requiring attendance at workplace relations training sessions, implementing a zero-tolerance policy for sexual harassment, and establishing formal procedures for hiring, firing, and disciplining employees, but there is no way to ensure your company’s safety.

Defending against discrimination lawsuits, even groundless ones, is expensive.

Legal costs accrue at an incredibly fast rate during business litigation. The average cost to have a meritless lawsuit dismissed is between $10,000 and $15,000. If a slight concern about your company’s possible culpability causes you to agree to a quick settlement, expect expenses of $10,000 to $50,000. Costs rise sharply if there is any merit to the case against your company, with the costs of settlement and defense soaring to $150,000, $200,000, or more. Should your company be served with this type of lawsuit, your EPLI coverage reacts with legal defenses that may be included within or outside of the policy limits and would react to settlements and judgments awarded to the accuser.

Now that you have a better understanding of the many reasons why business owners should consider an Employment Practices Liability Insurance Policy, you can rely on MHG Insurance Brokers to ensure that you and your business are fully protected. The Insurance Specialists at MHG understand that every business is unique. We have the experience and resources to assemble a complete insurance plan that includes all the business insurance policies your company should have, including Commercial Property Insurance, Workers’ Compensation, Business and General Liability Insurance, and more. Call us today at 954-828-1819 or visit us online at mhginsurance.com, and let our Insurance Specialists show you how to protect your business from the expense of costly lawsuits and other risks.

Businesses of all sizes are at risk: whether you are the head of a large corporation or the owner of a small neighborhood company, once you hire your first employee, you expose your company to the possibility of a lawsuit.

Don’t Hire Your Next Costly ClaimGood help is hard to find. Everyone has heard different horror stories about coworkers and colleagues from their friends, or even ones they have experienced firsthand. Filling open positions properly within your company can have a great impact on your bottom line. From having unproductive and inefficient workers, or workers who go above and beyond, one thing that can have a direct effect to your bottom line is workers’ compensation. Workplace injuries can be quite expensive for employers, especially those companies that require skilled or physical labor. So, if you are interested in helping your businesses’ bottom line, use some of these tips to help avoid hiring your next costly claim.

Before the Hiring Process

Much like having a good foundation determines the strength of a building, hiring practices can have a similar effect to your business and its future. Preparation is very important when starting the hiring process. You want to be sure the right people are in the right jobs to get the most out of your team. Putting someone into a position that has no experience or background in said position could result in mistakes and possible injury if they lack training and experience. There are many ways to do your homework when beginning the hiring process, from gathering analytics of the mistakes that people make in the workplace, to psychology of people that will put them in the best position. Assessing problems before you make a hire can be best form of preventing a loss.

During the Hiring Process

Job interviews and job shadowing, or any other form of evaluating someone before hiring them is a great opportunity to see if someone is not only a perfect fit for the position, but your company culture as well. Unfortunately, you can’t ask someone about previous claims they were involved in, however, you can ask them about any gaps in their employment. Also, be sure to ask them how they would handle certain situations that can arise such as emergencies or other scenarios that may put them or their coworkers in danger. So far so good? If so, you should contact all their references to get a feel for how they are viewed from their past employers.

Don’t Stop Once They’re Hired

Once your new employee has passed all screening and gone through all the training necessary, welcome him or her to the company! An employment offer should be contingent on successful completion of screenings. Completion of a thorough hiring process should help to ensure the new employee will be a good fit. But the process shouldn’t stop there. Just because you have found your new employee, doesn’t mean you should stop working to avoid a claim. Implementing regular safety and training programs for all employees is a good practice that helps to avoid catastrophic and frequent claim. Lastly, all processes and procedures should be communicated loud and clear so that everyone in your workforce is aware of the company’s expectations. 

Workers’ Compensation Insurance should be a top priority for all businesses. If you have any questions, or are interested in purchasing workers’ compensation insurance, or any other form of Property & Casualty Insurance, please contact us at 954-828-1819 or visit our website mhginsurance.com. Our insurance specialists have the knowledge and experience to assist and advise your business about all the necessary business insurances.

Filling open positions properly within your company can have a great impact on your bottom line. Use some of these tips to help avoid hiring your next costly claim.

How to File a Marine General Liability Insurance ClaimFiling an insurance claim can be a confusing and lengthy process. In many cases, people have never been involved in a claim before. They may not think to do things in the moment that may help them later during the claims process. Let us help by offering some tips when filing a Marine General Liability insurance claim.

Call Insurance Agent and Insurance Company

The most important place to start when there has been a loss is with your insurance agent. If you are unsure whether a claim should to be filed, your agent can help. Your agent will collect the necessary information, and guide you with the next steps that you will need to take. Do not hesitate to contact your agent, he or she handles claims daily and will be able to give you advise that can save you time and aggravation.

List All Damages Incurred

Make a list of all the damages that have been incurred. Some damages may not be obvious, and may require further investigation by the adjuster or another trained professional. Make notes of any specifics about the incident like time of day, weather, and people present at the time of the incident.

Take Pictures

Having proof of damage can affect the outcome of a claim. If an incident occurs, take pictures to document the damage to property as soon as possible. This will help the adjuster if emergency repairs need to be completed to prevent further damage. Keep all photos and receipts for emergency repairs in a safe place and be sure to hand them off to the adjuster as soon as possible.

Prevent Further Damage

After assessing and documenting the damages, do what you can to prevent further damages from occurring. Whether that means clearing the area of other materials, or securing machinery, do what you can to limit the extent of the damage. It is also important to exercise caution when trying to prevent further damage. If it is not safe to be in the area, do not risk injury to yourself or others by trying to limit damages to property.

Who Should the Company Contact to Follow Up on Claim?

It is important to organize who will oversee the claims process within your company. Make sure this person has access to certain information about your business that may be needed during the process. Also, having one person be in charge may also make this process more efficient and ultimately help close the claim faster.

Having the proper insurance coverage is crucial for the success of any business, and every business needs coverage specific for its characteristics. If you have any more questions, would like further explanation, want to change your general liability policy to a marine general liability policy, or are interested in any other form of business insurance, please contact us by calling 954-828-1819 or visiting mhginsurance.com. We look forward to assisting you with all your insurance needs.

Let us help by offering some tips when filing a Marine General Liability insurance claim.

mgl claimNo matter what type of business you have, every business has unique needs when it comes to liability protection. Especially if your business is conducted near or on the water, such as marinas and shipyards. Marine general liability coverage is necessary for businesses of this nature. There are some businesses who aren’t aware of the difference between marine general liability and commercial general liability. One difference is that commercial general liability policies often include an exclusion for work done on or near water. This is important because if the incorrect policy is purchased, there may be no coverage at the time of a claim. Claims typically happen when you least expect them. The following are three common marine general liability claims. 

Slip and Falls 

We are all familiar with slip and fall accidents. Businesses on or near the water can create more opportunities for wet floors, or other areas of moisture. It is important to have proper signage around your property/building giving warnings of “slippery when wet.” Installing non-skid flooring is another way to help prevent a slip and fall claim. Keep in mind that slip and falls can happen whether there are wet floors or not. No matter how much precaution you take, you still need proper insurance coverage in case of a claim.

Damage to Someone Else’s Property

Just as damages and mishaps can happen on your property, they can happen on others’ property as well. If your business involves employees doing work at a marina, shipyard or private dock, you may be held liable for damage caused by your employee. Properly train your employees, and provide safety procedures that employees are required to follow at every location. Marine contractors that do work involving welding are especially vulnerable to this type of claim.

Pollution Liability

Work done on or near the water involving boats has an inherent risk of a pollution loss. There are state and federal regulations involving pollution both from gasoline and oil. Both substances are used daily in many marine operations. It is very important that the policy include coverage for Sudden and Accidental Pollution Liability. A marine contractor can be subject to stiff fines and penalties for polluting a body of water.

Having the proper insurance coverage is crucial for the success of any business, and every business needs coverage specific for its characteristics. If you have any more questions, would like further explanation, want to change your general liability policy to a marine general liability policy, or are interested in any other form of business insurance, please contact us by calling 954-828-1819 or visiting mhginsurance.com. We look forward to assisting you with all of your insurance needs.

Claims typically happen when you least expect them. The following are three common marine general liability claims.

shipyard with cranesShipyard owners are concerned with protecting their businesses from exposure to financial damage, especially in the form of lawsuits and liability issues. As part of their ongoing efforts to insulate their businesses from harm, these conscientious proprietors are checking to make sure that the firms they do business with meet all insurance coverage requirements. If your maritime business lacks the necessary USL&H coverage, you could find yourself facing the harshest of penalties – including the loss of valuable contracts, the imposition of stiff fines, and even actual jail time!

Does your business have the USL&H coverage it needs? Find out by perusing this handy guide on the key facts of Maritime Workers Compensation coverage:

USL&H Is a Requirement to Work on Board Vessels 65' or Greater in Length or at a Dock, Port, or Shipyard

USL&H, which refers to the Longshore and Harbor Workers’ Compensation Act, was enacted to provide compensation to employees in the event of their injury or death while performing maritime work on board a vessel or at a dock, port, or shipyard on navigable waters of the United States. USL&H is federally mandated, which means companies that fail to obtain Maritime Workers Compensation coverage as required are subject to stiff penalties that can include fines of up to $10,000 and incarceration in prison for a year. Even more seriously, uninsured employers and company officers may also be held personally and severally liable for compensation and any other benefits that may accrue to an injured employee.

USL&H Is Workers' Comp Coverage for Contractors Working on/with Vessels

USL&H coverage provides benefits similar to Workers' Compensation to contractors performing any maritime work on or with vessels on navigable waters of the United States. Accidental injuries, occupational diseases, and death arising from the employee's employment are covered by Workers' Comp; similar benefits accrue to maritime employees under USL&H coverage. Even contractors’ employees who have "incidental USL&H" exposure, such as electricians, heating and AC contractors, flooring installers, and other personnel performing repairs on equipment located on a boat, are covered under Maritime Workers Compensation if they suffer any damage while performing their duties.

Shipyards Can Require USL&H Coverage for Even a Single Employee

While USL&H benefits are similar to benefits provided by Workers’ Compensation Insurance, the rules are far more stringent. Workers’ Comp is only required for businesses with four or more employees in Florida, other states may vary, including owners unless they are exempt. Contractors that fall under USL&H guidelines, however, need to provide coverage even if only one employee at their company will be performing qualifying work.

Carrying Inadequate Marine Insurance Coverage Can Be Costly

In addition to Maritime Workers Compensation benefits, MHG Insurance Brokers also provide marine general liability insurance, which protects you in the case of liability or property damages to a third party while engaged in marine related operations. Marine general liability insurance is an absolute necessity for any business providing repair or other services on vessels, as even seemingly minor damage to a boat can prove to be expensive. Now that you know the relevant details about USL&H – shipyards are checking if you have it, Federal law requires you to carry it, and there are stiff penalties for companies that do not have it - the experienced Insurance Specialists at MHG Insurance Brokers can help you obtain the USL&H policy that best suits your needs.

At MHG, we understand the unique environmental conditions of working on the sea, as well as the accompanying challenges. We strive to help marine companies find the best, most affordable marine insurance plans to suit each and every employee.

To learn more about USL&H coverage, marine general liability insurance, and other marine insurance plans, call MHG Insurance Brokers at +1 954 828 1819 or visit us online at mhginsurance.com

Does your business have the USL&H coverage it needs? Find out by perusing this handy guide on the key facts of Maritime Workers Compensation coverage:

Auditor Looking At DocumentWorkers’ Compensation, also known as Workers’ Comp, is usually one of the largest expenses for businesses. Since it is something that employers invest so much money into, it’s always a good idea to be prepared for your next audit, and make sure all of your ducks are in a row. The reason an audit is performed is to determine your Workers’ Compensation Insurance premium. Considering the outcome of the audit can result in drastic changes to your premium, you may want to follow these tips on how to prepare your business.

1. Gather all necessary records
To prepare for an audit, you will need to have all paperwork and documents ready and organized before the auditor arrives. They will most likely be looking for payroll records, federal tax reports, unemployment records, individual overtime payments, detailed job descriptions, and use of contractors and subcontractors along with certificates of insurance.

2. Make accurate payroll projections, and keep track throughout the policy year
When making payroll projections, you should try your best to be as calculated as you can be, especially if there are any class codes that apply to your operation. It’s also a good idea to monitor your projections during the policy year in order to know where you stand when the next audit comes around. To make it easy, set up quarterly reviews to compare your projections with your actual payroll.

3. Understand the breakdown of certain payrolls
Not all payrolls are the same. For example, if you employ a marine worker who spends half of their worktime on the water, that time will need to be kept separate from the time in the office because it is considered more risky. The same example can be used for a truck driver who splits time between an office, and on the road. Be sure to file the different payroll tasks by different job descriptions. Also, be sure to list overtime individually, because there is a good chance that overtime may have a discounted premium.

4. Check for certificates of insurance for any contractors or subcontractors
You will be required to show proof that any contractors or subcontractors that you hired had their own Workers’ Compensation Insurance, and were not covered by your company. It is also important to make sure all the dates are aligned for the time they worked for you. Without proper documentation, your company could be charged the premium for the contractor during the time you used them.

5. Be involved with the process
Don’t let them leave without reviewing their work and becoming aware of the impact that the audit could have on your business. Also, make sure you have looked over the worksheet the auditor will ask you to sign, and make sure to keep a copy for your records. If the worksheet has yet to be completed, don’t sign it! This helps keep all surprises down to a minimum.

Points to keep in mind

Dealing with an auditor may not be the friendliest experience. Don’t expect to make friends and go out for drinks after, they are only there to look at your payroll, get the figures they need, and leave. Also, it is good for you to know that most of the time, your insurance agent or broker isn’t involved in an audit unless there is a problem. If you don’t hear from us, don’t worry, we haven’t forgotten about you! The auditor will contact you at the end of your period whether you have renewed or not, and at that time, it is a good idea to keep your agent in the loop of the situation.

If you have any questions, or are interested in purchasing Workers’ Compensation Insurance, other types of business insurance, or group health insurance for your employees, please contact us at 954-828-1819 or visit us online at mhginsurance.com. Our insurance specialists have the knowledge and experience to cover your company’s risks appropriately.

Considering the outcome of the audit can result in drastic changes to your workers' comp premium, you may want to follow these tips on how to prepare your business.