If you don’t complete your audit and the insurance company marks you as non-compliant, one of two things can happen and neither of them are in your favor.
· The insurance company may decide that they will just estimate your audit for you. Usually if an insurance company takes this route they will use either double or triple the estimated payroll which means that you will end up owing the insurance company a payment immediately equal to 100% or 200% of your previous year’s workers compensation premium all at once since they typically will not allow a pay plan for a non-compliant audit.
· The insurance company may decide to cancel your policy. If they take this measure then they will also notify NCCI (National Council on Compensation Insurance) who is the insurance rating and data collection bureau for the state of Virginia. When this occurs, NCCI will notify every other insurance company in the state of Virginia that you are not compliant on your previous audit which makes you ineligible for Workers Compensation insurance with every carrier in the state. If you are required by the state to carry workers comp, then this opens you up to fines and penalties from the state up to $250 per day you are without Workers Comp up to a maximum fine of $50,000. You then won’t be able to apply for Workers Comp with any insurance company until the audit is completed and marked as compliant which can take up to 60 days all along being fined $250 per day for not having workers comp during that time period.