California court revives insurer’s policy cancellation over payroll audit disputeA California appeals court ruled that a workers compensation insurer properly canceled an employer’s policy after the employer repeatedly failed to provide payroll records needed for a premium audit, overturning a Workers’ Compensation Appeals Board decision that had found the cancellation invalid. The dispute arose after the insurer sought payroll records following expiration of a 2020 workers compensation policy to calculate the employer’s final premium. An employee was injured Feb. 3, 2022, and filed a workers compensation claim. An arbitrator and the Workers’ Compensation Appeals Board concluded the cancellation was ineffective because neither the policy nor California’s Insurance Code specifically defined what constituted a “failure to permit” a payroll audit. The appellate court disagreed, finding the employer’s repeated failure to respond to requests for payroll records amounted to a failure to permit the audit under both the policy language and state law.