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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. More...
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