Today’s Shock Audit Email

 It’s frustrating when a small business reaches out to us with one of these Workers Compensation Shock Aufits, because they’re so common and so preventable if only a better job was done by the insurance system at various stages of the life cycle of a Workers Compensation policy.

This one involves a small start up package delivery company. A little over a year ago this company bought a Workers Compensation insurance policy for $1500.00.

Now, they have an audit bill for over $400,000 and it’s in collections.

And they don’t know what to do.

Fortunately, they found us. This is what we specialize in. And we believe we can substantially reduce this bill. But can the bill be reduced substantially enough for this business to avoid financial obliteration?

That’s the question we’re now exploring with this client.

One additional complicating factor: the business owner isn’t very fluent in English. But we’re working around that, thanks to a family member of the client.

But this case illustrates the dysfunctional way the Workers Compensation insurance system sometimes functions as a financial weapon of mass destruction for small businesses, particularly new businesses.

I mean, what other major industry could sell a product for $1500 and, a year later, send a retroactive bill for $400,000? No other legal business, I suspect. 

The insurance agent in this case? An online agency owned by an insurance company. All done in a perfectly legal manner, following the somewhat loose regulations that govern these things.

Now some collection attorney is sending out perfectly legal collection letters to these folks, demanding $400,000 with a straight face. And he’ll file a perfectly legal lawsuit if that bill isn’t paid and get a perfectly legal judgment and the company will cease to exist.

Except we can knock that bill down by, we believe, hundreds of thousands of dollars.

And maybe we can save this little business.