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Overview
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Audits |
Dentists | Auditing Insurance Policies Many insurance policies contain a condition stating they are subject to audit. We have prepared the information below to answer the more frequently asked questions about insurance policy audits. Q: Why will the insurance company audit my records? A: The premium we charged at the beginning of the policy period is based on an estimate of the exposures you gave us. An audit of your records allows adjustments to the premium based on the actual exposures you had during the policy term. Q: Who will audit my records? A: Either our agency or a representative of the insurance company. Q: When will the audit be made? A: We make every effort to have your audit completed within a reasonable time after the close of the audit period that is stated in your policy. Q: What records must I keep for the audit? A: You should keep ledgers, journals, registers, vouchers, contracts, tax reports, profit and loss statements, payroll and disbursement records, and all certificates of insurance you receive from any of your subcontractors. Q: Will keeping detailed records help me? A: Yes! Detailed records allow the auditor to more accurately determine your payroll (regular and overtime), sales, and subcontracted costs, if applicable. Your operation could be described under more than one rate class and different rates could apply. 'Without detailed records, we have difficulty determining which rates on your policy apply to your various operations. Not keeping accurate records could cause you to pay more premiums than you should. Q: What if I use subcontractors? A: Subcontractors who do not have insurance are treated as though they are your employees at the time we make our audit. If your subcontractor furnishes you with a certificate of liability or workers' compensation insurance, your insurance cost for that subcontractor is significantly lower. Not having the certificate could cause you to pay a higher premium. Q: Why should I maintain an adequate deposit premium? A: Your deposit premium is the premium we estimate at the beginning of your policy term. If we estimate too low, you may have to pay us a significant additional premium when we conduct the final audit at the end of the policy term. Many states have enacted legislation that governs the time in which an audit must be completed, billed and paid. This applies to audits for canceled policies as well as regular audits. For these reasons, it is important for you to make your records available for audit when our representative contacts you. If you would like additional information about the policy audit process, our agency will be
happy to help you |
