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Preparing for your assigned risk premium audit

What are premium audits?

Unlike other types of insurance you purchase, the premium you pay for your workers’ compensation coverage is initially an estimate and is not finalized until the end of your policy period. Every SFM policyholder, including those who have coverage through the Wisconsin Worker’s Compensation Insurance Pool, undergoes a premium audit at the end of their policy period. Workers’ compensation premium audits are an industry standard. The requirement to be audited is outlined in Section 5G of your policy. Read below for details on premium audits.

Since your organization’s payroll can change throughout the year if your workforce grows or shrinks, employees work overtime, or your organization expands or diversifies operations, an audit verifies that the estimated premium you paid initially is still fair and accurate.

The final premium might be more or less than the initial billed premium. If the premium estimate was too low, you will be charged additional premium. If the estimate was too high, you will be reimbursed for any unearned premium.

If you do not comply with the premium audit it could affect your current coverage.

Some policyholders have physical audits on location at their own facility, while others are asked to complete their audit online or on paper. SFM will let you know how your audit will be conducted.

To prepare for your audit:

  • Have your records ready in advance
  • Make sure your records are complete and accurate
  • Be available to answer questions

If you are asked to complete your premium audit online or on paper:

  • Have your business taxes on hand
  • Make sure your records are accurate
  • Be sure to answer all of the questions and to send in business tax documents
  • Contact your premium auditor or call 833-949-4336 if you are unsure which tax documents are needed

The following physical audit standards are in effect for Wisconsin Worker’s Compensation Insurance Pool policyholders.

New policies

  • Accounts with an annual premium under $5,000 require a final mail/phone audit regardless of governing class code if not receiving a physical audit.
  • Accounts with an annual premium of $5,000 to $49,999 require a final physical audit.
  • Accounts with an annual premium of $50,000 and over require a preliminary or interim and a final physical audit.
  • Accounts with an annual premium over $10,000 with a governing classification denoted as a “special category” require an interim and a final physical audit. “Special category” class codes include:
    • Amusements: 9016, 9180
    • Contracting: All classes
    • Farming: 0006, 0008, 0016, 0050
    • Restaurants / taverns: 9082, 9083, 9084
      Health care: 8824, 8825, 8826, 8829 8833, 8835
    • Janitorial: 0917, 9014, 9170
    • Logging: 2702, 2709
    • Security services: 7720
    • Trucking: 7228, 7229
  • All accounts that are engaged in employee leasing and temporary labor service contracting require an interim audit and final physical audit, regardless of annual premium.


Renewal policies

  • Accounts with an annual premium under $10,000 require a final physical, mail or phone audit.
  • Accounts with an annual premium of $10,000-$19,999 require a final physical audit at least once every three years. A final mail/phone audit must be completed regardless of governing class code when not receiving a physical audit.
  • Accounts with an annual premium of $20,000 and over require a final physical audit regardless of governing class code.
  • All accounts that are engaged in employee leasing and temporary labor service contracting require an interim audit and final physical audit, regardless of annual premium.

If you have questions, call SFM’s Wisconsin Worker’s Compensation Insurance Pool department at 833-949-4336.