Insurance audits are typically performed on commercial insurance policies which have adjustable or variable premium bases. When you purchased your policy, you paid a deposit premium based on your best estimate of those bases and at the end of the policy period, the final premium base must be determined. This process is called a Premium Audit.
By auditing these policies, insurance companies see that all businesses pay the correct amount. In addition, the Premium Audit provides valuable information on your business operations and allows you to have personal contact with a representative of your insurance company. This entire process is designed as a service to ensure that you pay only the premiums that you owe.
Soon after your policy expires (or is canceled). Normally, you will be contacted within 30 days in regards to completing the premium audit. Most audits can be completed in a fairly short period of time as long you have the proper records in order beforehand.
It is necessary for the auditor to ask questions about your records and business operations. If you cannot be present, it is extremely important for someone to be available that is familiar with the specifics of your entire operation and the job duties of all employees. If you direct the auditor to an outside accountant, he or she will obtain as much of the necessary information from them as possible, but will likely still have to speak with you for additional information.
Upon completion of your payroll audit, be sure to meet with the auditor to review your audit report. By addressing your questions then, you will avoid any unnecessary surprises when you receive your final audit invoice. If your premiums have been under-reported, you will receive an invoice for the amount due; if you have overpaid, a credit or refund will be issued. It is important to know that deliberate under-reporting of payroll is considered insurance fraud and can be prosecuted to the fullest extent of the law. If you have any questions or encounter any problems during the audit process, please contact our office at 800.311.0997.
Your insurance policy is a legally binding contract between you and your insurance carrier. One of the conditions of the contract states, "You will let us examine and audit all of your records that relate to this policy."
Yes, the auditor will need to verify that you do indeed work alone. To do that, he/she will look at disbursement records, check stubs, or possibly income tax returns. The auditor is also required to look for and review your relationship with any independent contractors who you may have used during the policy period.
Yes, remember the purpose of the audit is to review your actual business activity for a previous period, during which your policy with our company was still in force.