Streetsmart insurance Blog
When you purchase a business insurance policy, your premium is based off of your business’ value, payroll costs, or gross revenue. Your insurance company will allow you to complete the purchase based on an initial statement, but they will also verify those numbers by conducting insurance audit. Some policies, such as Worker’s Compensation, require a yearly audit, and others are audited every three years.
When conducting an insurance audit, your insurance company will review your enterprise as well as your business records to confirm that you have paid the right amount for your insurance policy. Your auditor is an employee of the insurance company, and their sole concern is confirming the accuracy of your statement so that your policy can be priced appropriately.
An insurance audit can be an extraordinary blessing for a business owner. If you overestimated your earnings and wound up paying more for your policy than you should have, your insurance company may return your excess premium. On the other hand, if you underestimated your earnings your insurance company will raise the cost of your current policy while retroactively charging you for the premium you should have paid before.
How Can I Prepare For An Insurance Audit?
Give Accurate Estimates – When you purchase your insurance policy, your agent may ask for figures that you don’t know offhand. Instead of providing inaccurate estimates, go through your records and confirm that the value of your assets, payroll, and revenue is correct. By doing your due diligence upfront, you will build a stronger relationship with your agent and save yourself unnecessary expenses in the future.
Maintain Good Records – An insurance auditor will rely on business records to determine the value of your company. Keep clear, factual documentation of your business practices so that your insurance company can price your policy appropriately.
Work With Your Auditor – Insurance audits are designed to build trust between insurance companies and their clients. When preparing for an insurance audit, honesty is always the best policy. Your auditor may ask for accounting documents, bank statements, and contact information for past employees or contractors. Provide them with everything they need so that your insurance company can give you the best rates possible.
StreetSmart Insurance is committed to providing affordable coverage.
Whether you are looking for your first business insurance policy or you are shopping for a better price, our agents are ready help!