Some commercial policies begin with estimated payroll, sales, or another exposure measure and reconcile that estimate after the policy term. The premium audit determines the final exposure and may produce an additional charge or return premium.
- Describe your operations accurately
- Match limits, deductibles and policy forms
- Confirm requirements with a licensed professional
Some commercial policies begin with estimated payroll, sales, or another exposure measure and reconcile that estimate after the policy term. The premium audit determines the final exposure and may produce an additional charge or return premium.
Important: This guide provides general educational information, not legal, tax, or insurance advice. Requirements and policy terms vary. Consult a licensed professional about your situation.
Why audits happen
An estimated premium allows coverage to begin before the year’s final figures exist. At audit, the insurer applies policy rules and classifications to actual records. The process is common in workers’ compensation and may appear in liability policies.
Records to organize
Follow the auditor’s request and retain supporting records. Typical items can include payroll summaries, tax reports, general ledgers, sales records, certificates of insurance, subcontractor payments, job descriptions, and operations by location.
- Payroll by employee, duty, and state
- Overtime records where applicable
- Subcontractor payments and certificates
- Sales or revenue by operation
- Changes in ownership or services
Review the completed audit
Compare classifications, exposure totals, officer treatment, subcontractor handling, locations, and policy rates with your records. Ask for the audit worksheet and dispute instructions if something appears incorrect. Respond by the stated deadline and preserve documentation.
Compare the real first-year cost
Premium is only one line of a proposal. Add fees and installment charges, then compare equivalent coverage.
Open the quote calculatorSources and further reading
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Research reviewed on August 2, 2026. Prices and requirements can change; this page does not provide a quote.