Insurance Audit Season in Florida: What Contractors Should Expect

For most Florida contractors, insurance audit season arrives sometime between January and April, when your workers\u2019 comp and general liability carriers send notice that your annual audit is due. For contractors who are prepared, this is a routine process. For those who are not, it is the start of a stressful and expensive few months.

How Florida Insurance Audits Are Conducted

Most Florida contractor audits are conducted as mail or phone audits \u2014 the carrier sends you a request for documents and you submit them by a deadline. Physical audits, where an auditor visits your office, are less common but do occur for larger accounts or when the carrier has questions about a previous audit. Either way, the documents requested are essentially the same.

What Documents the Auditor Will Request

A Florida workers\u2019 comp or GL auditor will typically request payroll journals or reports for the policy period, quarterly 941 federal payroll tax returns, state reemployment tax returns, W-2 forms for all employees, certificates of insurance for all subcontractors used during the period, and your general ledger or income statement (for GL audits based on gross receipts). Having these documents organized and ready before the request arrives is the single best thing you can do to ensure a smooth audit.

The Three Most Expensive Audit Mistakes

The first and most expensive mistake is missing or expired subcontractor COIs. Every sub without a valid COI gets their payroll added to your audit. The second mistake is failing to segregate clerical payroll from field payroll. The third mistake is not reviewing the audit worksheet before paying the bill. In our experience, a significant percentage of Florida contractor audit bills contain at least one disputable error.

What to Do When You Receive Your Audit Bill

Do not pay immediately. Request the audit worksheet. Review every line for errors. If you find discrepancies, file a formal dispute in writing within the carrier\u2019s dispute window (typically 30\u201390 days). If the bill looks correct, pay it \u2014 but also use the audit as a learning opportunity to improve your records for next year.

Audit Monkey prepares Florida contractors for insurance audit season year-round. Contact us to get your records in order before the auditor calls.