I am a small business owner. I employ someone who does most (ok, all) of the paperwork associated with the business. I also have an accountant that does stuff. So I basically am employed by a business I own but do not really understand. (Hey, it works for me)
So, if I understand this correctly, I pay an insurance company for a Workers’ Compensation policy. They pay out if my employee is hurt on the job. I am in Pennsylvania, btw.
Each year, we get a notice from an independent company that is auditing my business for the insurance company I have the policy with. This happens every year. Why? I have never had a claim, the business is not “high risk”, my payments are always on time.