Interesting Call From A Small California Contractor

We got an interesting call from....oh, you read the headline. So, anyway, this gentleman called because he's just had a Shock Audit, even though he didn't have any employees. But one of his clients required him to get a minimum premium policy so he did, and now he has a bill for $14,000 that has already been turned over to some collections law firm based out in the Chicago suburbs.

As you may have anticipated, this small businessman used independent contractors over the course of the policy. And the nice person at the collections law firm explained that the rules about that are uniform in all states so that's why he has this $14,000 bill.

Except the nice person at the collections law firm lied. Or didn't know what he or she was talking about, perhaps. Because the rules are not uniform across all states and in particular are not uniform in California (when compared to other states).

Workers Compensation is very much a state-by-state matter and the rules about premium can vary from one state to another, sometimes in only small ways but sometimes in big ways. Most states do use the NCCI system of classifications and premium rules, but some states don't. And the biggest state that doesn't use the NCCI system is California.

So the bottom line is that we're pretty confident we can at least reduce that $14,000 bill significantly for that small California contractor. But it's a little galling that people that should be giving reliable information are instead providing information that is wrong, and wrong in a self-serving way.

I guess that probably sums up exactly why we're still in business, thirty years after I started Advanced Insurance Management. If the insurance system gave reliable and accurate information to businesses about Workers Comp insurance and audits and classifications, and didn't make outrageous and self-serving errors in applying the rules that they themselves write, there wouldn't be much for us to do around here. Our foosball table would see a lot more use, I guess.

Instead, it feels like the insurance industry is working overtime to create work for us. We're certainly busier than we ever were when I started this little outfit. I literally get a phone call or an email every single day (sometimes on the weekend, too) from an employer somewhere in the U.S. who's been victimized by a Shock Audit on their Workers Comp insurance. So I guess it's a good thing I like my work.