Premium audit

How it works

The carrier requests records relevant to the policy and period, such as payroll, sales, classifications, or subcontractor information. The agency can help the client understand the request and organize records. Compare the audit result with the reported exposures and the policy terms, including any minimum premium.

Why agencies care

Subcontractor costs, classifications, and missing records can affect an audit. The applicable rules and policy terms determine how they are treated. Collect the requested evidence and ask the auditor to explain disputed items rather than assuming that every subcontractor cost is payroll.

Unpaid audit balances follow the account. They can block a rewrite with the same carrier and end up in collections. Setting honest exposure estimates at intake, and collecting subcontractor certificates all year, is cheaper than fighting the audit later.

Help the client prepare before the request arrives

Keep exposure estimates, classification notes, and relevant subcontractor records together during the policy term. When the audit arrives, compare like periods and ask for clarification on any unexplained adjustment. Check the carrier's response deadline.