What Is an Insurance Premium Audit and Why Is It an Essential Part of My Commercial Insurance Contract?
An insurance premium audit is a examination of the business owner’s operations and accounting records. A premium audit is performed to determine the actual insurance exposure for the coverage provided by the insurance company. While it is the contractual obligation within your insurance policy contract for your insurance carrier to conduct the premium audit, it is to your advantage to have the audit completed accurately and on time. The results of your premium audits are shared with insurance regulatory agencies/bureaus that use this data along with that provided by similar businesses to develop a wide array of class data. Insurance Regulatory Agencies/Bureaus When conducting the insurance premium audit, all carriers are required to adopt rules established by the following: • NCCI (National Council on Compensation Insurance)-The National Council on Compensation Insurance (NCCI), headquartered in Boca Raton, FL, is a voluntary, non-profit, statistical research and ratemaking organizatio
