Potential Audit Surcharge Reminder for Businesses

Effective January 1st, 2017, the State of Wisconsin implemented a penalty that is mandatory on all Wisconsin Worker’s Compensation insurance policies. The penalty is called the Audit Noncompliance Charge (ANC).

It is important to note that businesses that do not comply with their workers’ compensation and general liability audits will see substantial penalties from their insurance carriers.

How Premium Audits Work

Workers’ Compensation and General Liability coverages are quoted on an estimated basis, and policyholders with these coverages are subject to an audit at the end of a policy term.

The audit is an opportunity to make sure the insurance carrier’s premium aligned with the policyholder’s 2017 exposures. It can result in either a credit or additional charge in premium.

Why the ANC Originated and How It Works

Surcharges are intended to encourage compliance with premium audits by providing a means for insurance carriers to assess a fee for policyholders who do not provide audit information in accordance with policy terms and conditions.

Please note, the Audit Noncompliance Surcharge may be a significant sum for businesses, and it is an avoidable cost.

  • The Workers’ Compensation Noncompliance charge is two times the estimated annual premium.
  • For General Liability, we will increase the estimated exposures by 50%.

Insurance carriers will mail policyholders three requests to obtain audit information. If, after these requests, the carrier does not receive a response from the policyholder, they will apply the Audit Noncompliance Charges and increase estimated General Liability exposures.

However, if the policyholder complies with the audit after the charge is applied, the carrier will remove the charge and update the audit.


If you have any questions about these surcharges, please contact us at Neckerman Insurance Services.

Information from SECURA Insurance 

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