Yes. Audits can result in unexpected charges if your documentation is incomplete or payroll was underreported. Many contractors are caught off guard by audit bills when their paperwork doesn’t match their policy projections. Surprise bills happen when records are missing. Keep detailed payroll records, subcontractor agreements, timecards, and COIs.
Fraud is a crime
If your application contains purposefully misleading, absent, or inaccurate information, you could be charged with fraud. Your insurance carrier could potentially void your policy, or you could face civil or criminal charges or penalties.
Any person who knowingly and with intent to defraud any insurance company or other person, files an application for insurance or statement of claim containing any materially false information or conceals, for the purpose of misleading, information concerning any fact material thereto, commits a fraudulent act, which is a crime.
