Court Says Employer's Failure to Provide Payroll Records Justified Policy Cancellation

A California appeals court on Thursday held that a workers’ compensation insurer properly canceled an employer’s policy after the employer failed to respond to repeated requests for payroll records needed for a premium audit, reversing a Workers’ Compensation Appeals Board ruling to the contrary. Although the exact phrase "failure to permit an audit" is not defined in the Insurance Code and was not defined in the policy, the Court of Appeal for the 3rd District of California said provisions in the policy imposed a clear obligation to provide payroll records upon re...