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A premium audit will be conducted on your
Workers' Compensation or other commercial
insurance policy. The primary function of
the audit process is to determine the actual
payroll, sales, subcontract cost, or other
exposure used in calculating the final
premium on your policy. Your premium will be
adjusted as a result of the audit. If
exposures have been underestimated, an
additional billing will result. If exposures
have been overestimated, a billing credit
will result.
Types of Audits
Preliminary Audit:
At the beginning of your policy year, an
on-site audit may be performed to review
operations, classifications, and exposures.
The auditor will review a representative
base period in order to project exposures
for the full policy term.
Final Audit:
This audit is made at the end of your policy
term to compare your policy premium to
actual exposures. Since your policy was
written with estimated exposures, this audit
will determine actual exposures, and
therefore, an actual, rather than estimated
premium.
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