Business insurance policies can be auditable. What will that mean for you and your business?

General liability, workers compensation and garage liability insurance policy prices are based on an estimate of your sales, payroll or number of employees. Keyser will review your operations with you, and submit an application based on your projections for the coming year, to an insurance company.

Typically, policies are issued on an annual term. After each policy term expires, a phone, mail or physical audit will be scheduled, to determine your exact exposures during the prior year. This means a five-to-10-minute discussion with a phone auditor, a 15-to-20-minute online survey form, or a one-hour (average) visit by a physical auditor. Some large operations may require more time. We know you’re busy and want to be mindful of your time, so we make sure premium audits are done as efficiently as possible.

Audits specific to your business

If your policy is payroll-based, the auditor will need to look at payroll records for the prior year. These typically include detailed payroll records you kept by employee, as well as the payroll information you submitted to your state unemployment commission. If you hired independent contractors or temporary labor, the auditor will look at your check register, and any 1099s issued during the calendar year for comparison. The auditor may ask about each person’s job duties.

If your policy was sales-based, the auditor will review your sales records, a profit and loss statement, and may compare these to your prior year’s tax records for reference.

For contractors, the auditor will review employee payroll, subcontracted labor costs, and amounts paid from your reporting forms and check register. The auditor may examine any certificates of insurance provided by your subcontractors. Materials installed by the subcontractors you hire will be included in the subcontractor labor amounts.

Keeping the information we have about your business up to date is important for maintaining the right coverage. Contact your agent with any updates to your business.


[SOURCE: Auto-Owners Insurance]