What is a premium audit?
An accurate premium audit is a benefit to you and your business. An initial premium for some policy types is estimated based on past records of your operations. After the policy period ends, a premium auditor conducts a premium audit to determine what your exact insurance exposures were during the policy period. If necessary, your insurance premium is then adjusted to reflect your actual exposures. What types of business policies are audited? Policies with variable or fluctuating exposures, such as payroll, total cost, sales/receipts, and admissions have estimated exposures when written. Typically, policies such as Workers’ Compensation, General Liability, Garage Liability, and Inland Marine Installation Floater polices are audited. Who performs the audit? Our own staff of premium auditors performs our audits whenever possible. Due to geographical constraints, capacity and size of account, we may also contract with outside premium audit service providers. What information/records are n
<< back to Premium Audit Information A premium audit is the confirmation and verification of the payroll reported and the classification code(s) assigned to the business operations on your policy. The rules set forth in the National Council on Compensation Insurance (NCCI) Basic Manual and Scopes Manual are used to properly assign classification codes, determine reportable payroll, and calculate the final premium due. For specifics about the Basic Manual and the Scopes Manual, contact your agent or the State Insurance Fund. In this section, you will find information to assist you with the audit process. If you have specific questions about your policy, please contact the State Insurance Fund.
A premium audit is a review of a policyholder’s records and operations to ensure that the coverage information is accurate. One of the conditions of your insurance contract is to provide the necessary information to complete an audit. The goal of the audit is to assess if your insurance premium accurately represents the proper risk exposure—no more, no less.
Related Questions
- When doing an adjustment upon audit and the earned payroll is less than the minimum premium and is less than the expense constant, (see Minimum Premium Rule, found in the WI Basic Manual), how is this reported on the USR?
- Since the Data Call instructions for capturing exposure data and developing the audit file specifications do not require a premium to be reported, is the premium amount required for audit purposes?
- What Is an Insurance Premium Audit and Why Is It an Essential Part of My Commercial Insurance Contract?
