CPAs are always looking for ways to provide value to their clients or organizations. Workers’ compensation insurance, for example, is a specific place where savings can be had — if CPAs are aware of it. In fact, more than 75% of organizations are unaware they’ve overpaid for their workers' comp insurance due to constant changes in the workers' comp industry, such as from the National Council on Compensation Insurance (NCCI), state-specific rules, and regulation and policy changes, not to mention the application of incorrect rates, discounts, classifications, experience modification calculations, payroll and audits. In addition, most insurance carriers use third-party companies to perform their annual audits. These third-party companies rarely go on-site and instead perform the audits by phone which further increases the chance for errors.  

CPAs need to inform their organizations and clients to be aware of the following errors that can occur regardless of the agent, broker, agency or insurance carriers involved in calculating the premium: 

• Misclassification of employees. There are nearly 800 different employee class codes which causes confusion and leads to misclassifications and higher premiums. 
• Incorrect calculation of experience ratings/modification (mod) factor. Companies receive a rating based on their past claims history. Companies that have an experience rating/mod above 1.0 pay a penalty. Companies that are below a 1.0 rating receive discounts. Helping a company lower their rating will decrease their premiums.
• Incorrect calculation of overtime pay. Overtime wages are to be calculated at regular time when reporting payroll to their workers’ comp carrier. Often, companies calculate their overtime wages at time and a half or double time when reporting payroll to their carrier.
• Open claims can affect the experience ratings/mod. Claims that are left open can affect a company's experience rating/mod which will increase their premiums.
• State-issued credits are available. Depending on the industry, companies can qualify for annual state-issued reimbursements. Many companies are unaware they qualify for this credit.

The system for computing workers’ compensation insurance premiums is complicated, involving insurance companies, rating bureaus, insurance agents and the injured. And there’s no one agency or governing body that oversees the entire process from start to finish. Despite the best intentions of insurance agents and insurance companies in classifying and applying the rules and regulations, it’s not uncommon for errors to occur, resulting in large sums of money being overpaid.