A Shock Audit from South Carolina

 Shock audits for Workers Comp insurance happen all over the U.S. I know, because I get calls and emails almost every day from some small business, somewhere in the United States, that's been clobbered with one of these Shock Audits.

This South Carolina small flood restoration business bought a Workers Comp policy for around $1,000.00. Now they have an audit bill for $77,000.00.

This is for a policy that didn't even last a year. The insurance company cancelled them after eight months when the policyholder dared question a change to the policy that suddenly caused a $28,000 bill for additional premium.

Fortunately, my initial review finds that an awful lot of that audit bill can be removed, once all the various mistakes the insurer made are corrected. And there are multiple mistakes, mainly over classifications but also about independent contractors being improperly included.

The insurance company did an audit for this policy--sort of. Judging from the results, it was an audit in name only. No actual effort appears to have been expended to determine the actual proper classifications and payrolls--the insurer's people just quickly and conveniently applied an extreme, worst-case scenario to every potential question, billed that out, and moved on to the next victim--err, policyholder.

But these errors are very fixable. And they will be.

As I often say, in a perfect world, I should have to be doing something else for a living.

We do not live in a perfect world, alas.

Interesting Deposition Today

 Had another deposition taken today in another California litigation, and opposing counsel asked a question that I hadn’t anticipated. He asked how a Chicago based expert would know anything about California Workers Comp insurance premiums.

And I had to smile to myself, because California has become one of two hot spots for my work in recent years, (the other is Georgia) so much so that I don’t think much about the geographic distance nowadays.

In this modern age, I was having my deposition taken via Zoom, for example. And internet and inexpensive phone service have rendered what once might have been significant geographic barriers into near nonexistence.

Sure, when I started my consulting practice back in 1987, my clients were largely local. But that was a different age, a different world . 

And it certainly is true that California has distinctly unique aspects to Workers Comp insurance premium rules.  But since the advent of the internet, I’ve had lots of California clients, and so lots of experience with the unique elements of Workers Compensation insurance in the Golden State.

Like I said, California has become a hotspot of demand for our particular consulting services, both for civil cases and criminal cases involving Workers Compensation insurance premiums and audits. I’ll be traveling there in two weeks to offer testimony at a trial there, and I’m scheduled to be back there in early February to testify at another trial.

Back in 1971, the Ides of March sang about LA being light years from Chicago, but nowadays, not so much for this particular son of the South