Roofing carries some of the highest workers' compensation rates of any trade, and the year-end audit is where many roofers get an unpleasant bill. The good news is that most audit surprises are avoidable.
Why roofing audits go wrong
Workers' comp premium is based on estimated payroll, then adjusted at audit to what you actually paid. Storm years blow up payroll estimates. Crews grow fast, subcontractors come and go, and paperwork falls behind. When the auditor finds payroll you didn't report, or subcontractors without their own coverage, you pay for them.
The subcontractor problem
If you hire subcontractors who don't carry their own workers' comp, your carrier will usually charge you premium on what you paid them — at roofing rates. Collect a certificate of insurance from every sub before they start work, and keep it current. A certificate that expired in July doesn't help with work done in August.
Classification matters
- Roofing crews are rated under roofing class codes.
- Sales staff who inspect roofs but don't install may qualify for outside sales codes.
- Office staff fall under clerical codes.
Keeping payroll separated and documented by role can significantly lower your premium.
Before the auditor arrives
- Gather payroll records by employee and job role.
- Pull certificates of insurance for every sub paid during the year.
- Separate overtime premium where your state allows it.
- Update your estimate for next year so you're not under-reporting again.
A little organization in October can save thousands in December.
This material is for general information only. Coverage depends on the actual policy language, and availability varies by carrier.