Premium Audit FAQ
|Q:||What is an Audit?|
|A:||A report of collected information of an insured’s operation and accounting records used to determine the actual insurance exposures for the coverages provided.
|Q:||Why and when is it necessary?|
|A:||The original premium on the policy is an estimated premium. The final audit determines the actual premium. When actual exposures differ from the estimated exposures, an adjustment must be made to the premium of the expired policy.
|Q:||What insurance coverages require an audit?|
|A:||The following insurance coverages require an audit:
|Q:||How should your records be kept?|
|A:||Proper record-keeping will permit the auditor to apply any allowable credits to your final premium. When the auditor requests payroll information, this includes remuneration. Remuneration means money or any substitute for money, and includes the following:
Division of Payroll
For General Liability, it is necessary for contractors to secure a Certificate of Insurance from each subcontractor they hire. Without a Certificate showing limits of liability of $500,000 or more, it will be necessary to classify these subcontractors as employees.
|Q:||Who conducts the audit?|
|A:||If the conditions of your policy require a physical audit, a Premium Auditor will contact you for an appointment. The Premium Auditor will examine and audit all records that relate to your policy.|