insurance premium Audit

The primary purpose of a premium audit is to determine your final premium. When your policy was issued, the premium was based on an estimate of variable exposure basis (usually payroll or sales). The audit will examine your records and determine the actual exposure basis and make sure that the correct classification codes and rates are used in determining your final premium. Because the original premium was an estimate, the audit will most likely result in a change of premium and/or classifications for your business.

Premium audits are commonly performed on workers compensation and general liability policies.

You will be contacted about completing a premium audit after the policy expires or is canceled.

A physical audit is an on-site review of your business and business records by a Society Insurance representative. You will be sent a letter or email to schedule an appointment. If your business records are located at an address other than your policy address, such as an outside accountant’s office, please notify the auditor

A virtual audit is a convenient way to complete your audit electronically instead of an on-site physical audit. All of the records needed are uploaded to our secure portal and a Society Insurance representative will reach out to you to discuss your business.

A voluntary audit is our most common type of audit. Log into our secure portal, answer questions about your business, enter financial information, and upload a few supporting records, such as tax reports.

At the beginning of your policy term, the auditor will review financial records for a small period in order to project the premium for the full policy term.

REQUESTED AT TIME OF AUDIT

To perform a comprehensive and quality audit, these records are generally needed. If there are multiple companies or multiple entities insured under one policy, this information will be needed for each company or entity.

GENERAL INFORMATION

• Description of company operations
• Officers/owners names and titles
• Employee names and job duties
• Number of employees
• Names of subcontractors and non-payroll labor hired

PAYROLL RECORDS

• Gross pay including, but not limited to: bonuses, commissions, holiday pay, sick pay, overtime pay, vacation pay and all pretax amounts
• Pretax/Section 125 amounts/401(k) amounts
• Overtime pay shown separately

SUBCONTRACTOR INFORMATION

• General ledger, cash disbursements book and checkbook register
• Names of subcontractors and non-payroll labor hired
• Certificates of insurance for subcontractors

TAX DOCUMENTS TO VERIFY PAYROLL/SALES RECORDS AND FEDERAL ID NUMBER

• 941, 940, 1099, W-2, Schedule C, income tax return, etc.

ADDITIONAL INFORMATION TYPICALLY REQUESTED FOR RESTAURANT, BAR AND FAST FOOD AUDITS

• Tips shown separately
• Number of free meals given to employees
• Subcontractors providing live entertainment
• Liquor sales and total sales to determine proper class for workers compensation