What does a final premium audit determine for workers compensation insurance?

The final premium audit for workers' compensation insurance serves to ensure that the premium paid by the employer accurately reflects the actual risk associated with their operations over the policy period. This process involves a thorough review of the employer's payroll, classification of employees, and the nature of the business activities to confirm whether the premium corresponds to the level of exposure faced.

When the audit is conducted, any discrepancies between the originally estimated payroll and the actual payroll may lead to an adjustment in the premium, either reflecting an additional amount due or a refund. This adjustment is crucial, as it aligns the cost of coverage with the risk profile, which is determined by factors such as industry classification and employee roles.

In the context of the other options, while they may touch upon various aspects of the workers' compensation system, they do not specifically address the primary purpose of the final premium audit: providing a financial reconciliation that correlates premium payments with actual risk exposure.