insurance premium Audit

Premium Audit female

Only pay the premium you owe

The premium audit process is designed as a policyholder service that guarantees you only pay the premium that you owe. When your policy was issued, the premium was based on estimated figures. The audit process occurs after your policy expires and will use your actual results (using payroll or sales) to determine your final premium. It is not uncommon for an audit to change the final premium of a policy.

understanding your premium audit

Premium audits are commonly performed on General Liability, Liquor Liability and Workers Compensation policies.

If you’re still looking for answers, here’s a more in-depth look at some frequently asked questions:

What is a premium audit?

The primary purpose of a premium audit is to calculate your final premium. When your policy was issued, the premium was an estimate of an exposure basis (usually payroll or sales) multiplied by a rate. The rate used is determined by how the exposure base is classified. The audit will examine your records to establish 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 General Liability, Liquor Liability and Workers Compensation policies. By auditing these policies, we can make sure that your business pays the correct premium. Typically, information from the audit will generate either a bill or a refund. In addition, the premium audit can provide valuable information about your business operations.

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

The audit process is designed as a service to you that guarantees you only pay the premium that you owe.

What is a mail audit?

If a physical audit isn’t performed, you’ll be asked to complete an audit through the mail. You will be asked to include supporting records, such as copies of tax reports.

What is a physical audit?

A physical audit is an on-site review of your business records by a Society® Insurance representative. If your business records are located at an address other than your policy address, such as an outside accountant, please notify the auditor.

What is a preliminary audit?

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

What do I need to do to prepare for an audit?


Listed below is typical information an auditor may request at the time of audit. If there are multiple companies or multiple entities insured under one policy, the auditor will request this information for each company or entity.


  • Description of company operations
  • Officers/owners names and titles
  • Employee names and job duties
  • Number of employees at each location
  • Names of subcontractors and certificates of insurance for subcontractors


  • 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


  • General ledger, cash disbursements book and checkbook register


  • 941, 940, 1099, W-2, W-3, income tax return, etc.


  • Gross sales for each type of service provided/work performed by location
  • Profit and loss statement
  • General ledger

Additional Information Typically Requested for Restaurant, Tavern & Fast Food Audits

  • Tips shown separately
  • Number of free meals given to employees
  • Live entertainment
  • Liquor sales and total sales to determine proper class for Workers Compensation

For even more details, download: Understanding your Premium Audit.

Society Insurance agents

premium audit questions?