Many business owner’s purchase worker’s compensation insurance and liability insurance policies that are auditable. This is not an IRS audit, so don’t get concerned! All worker’s compensation policies and most general liability policies are based on estimates of either annual payrolls or sales. At the end of the policy term, the insurance company conducts an audit and if the payrolls and/or sales were lower than the estimates provided to the insurance company, the business owner’ received a refund. If the actual payrolls and/or sales are higher, the business owner receives a bill.
Over the last 26 years, The Dearborn Agency has developed ways of assisting its customers in handling their frustration with the audit process and we would love to share them so that your next audit is quick and easy. These tips have been developed over a long period of time, as Wendy Beever from our office has been assisting business owner’s with their audits for over 25 years and is currently working towards her Associate in Premium Auditing, APA. The education received by obtaining An Associate in Premium Auditing, enables us to communicate with auditors in their own language and to better negotiate accurate audits. Try the following tips prior to your next audit.
- At your renewal proposal meeting with your agent, discuss the upcoming audit. Ask what to expect from your insurance company, will they do an “actual audit’, coming to your place of business and meeting with you? Or will they conduct a “voluntary audit”, requesting that you forward a questionnaire and payroll records to the insurance company? Your agent should be able to advise you as to which type of audit will be completed.
- Ask your agent if he/she will meet with the company and do the audit for you. If not, follow onto next tip.
- Provide a copy of your payroll records and duties for each employee, for that policy period, to your agent and ask that he/she prepare an pre-audit ahead of the company audit. This pre-audit will let you know exactly how the audit will be done.
As always, please do not hesitate to reach out to our office for any further clarification. We are happy to help.
