Audit Survival Guide
"Insurance audits are the best!" said no one ever. As an Insurance Agent, I realize this fact of life and have dedicated myself to improving the audit experience from "wretched" to just "mildly annoying." Workers' Compensation policy premiums are based on "remuneration" (explained below). You pay your initial premium based on an estimate for the upcoming year. Once the policy expires, the insurance company sends an Auditor to total the actual numbers for the period. The insurance company then adjusts the premium based on the actual numbers vs the estimate. If the actuals are higher, they send you a bill. If the actuals are lower, you get a credit or a refund. General Liability (GL) policies are also based on estimated exposures including payroll, gross sales and subcontracted costs. Other types of policies can be audited as well. This discussion focuses mainly on Work Comp. The best approach to an audit is prepare, prepare