How To Ensure The Best Case in an Insurance Premium Audit

When you’re the head of a business, you are well aware that trying to keep everything running smoothly can be a nightmare. Oftentimes, doing it yourself and learning to do many jobs is the best way to make sure things get done right. However, due to the intricacies and the various aspects of running a business, it is sometimes best to leave some things to the professionals. Most commonly, when your business is involved in any legal action, you hire a legal expert to get it done. And, just like getting a lawyer, it’s best to leave your insurance to the professionals.

With commercial insurances like general liability or workman’s compensation, your insurance premium audit is done by your insurance company when you annually renew your insurance. Unfortunately, determining a premium is solely based on estimations across several metrics. For instance, estimated payroll, cost of business operations, and cash flow losses are the main determining factors. However, premium often goes far beyond tangible facts.

Auditor bias, proper business classifications, and applicable business rates can all distort the insurance premium your business pays. It is due to these reasons that 25 – 50% of business owners have been overcharged at some point during their audit process. With a margin of error so high, upwards of $55 billion is additionally charged in the premiums of worker’s compensation alone. So, how can we get these numbers under control for your business?

Firstly, it’s most important to understand what kind of factors go into the insurance premium auditing. One of the main factors is the amount of payroll. Insurance carriers need to review your journals, summaries, and individual earning records to understand how much insuring your business would actually cost. This also means cash disbursements, which include subcontractors and a summary of monthly totals grouped by accounts.

Similarly, insurance carriers need to keep track of your deductions as well. Cash receipts, especially service and repair bills, compiled the monthly totals by source. In addition, both state and federal tax records are needed in the forms of income statement reports, gross sales, and corporate returns. Lastly, you need to present your current certificates of insurance.  General liability, worker’s compensation, and other commercial insurances along with the limits and proofs of coverage. Locating this plethora of documents, getting them all in order, and tracking each one’s status with the carrier can be such a daunting task.

Fortunately, modern technology has taken a large part of the burden off business owners. With artificial intelligence (AI), premium trends and impacts can be more accurately estimated, and any anomalies can be easily detected. By relying on technology over simply human review, you can boost data accuracy and reliability. This reduces the likelihood of inaccuracies, or any potential shifts in premium that drastically increase the price.

This is where an insurance premium audit company comes in. They function by auditing your business’s premium on your behalf, potentially saving millions of dollars for your company. With the combination of AI and seasoned, expert policy auditors, you can rest assured your insurance policy is getting the best price possible. So how exactly do they go about it?

Firstly, they establish themselves as the primary source of contact with your insurance company’s auditor. Not only does this take the onus of monitoring for communications off of you, but it also ensures clear communication and mitigating the amount of errors in communication. After this, they gather all the necessary records that need to be presented to the insurance companies, in order to make it an easier auditing process. But, before they submit it, a team of experienced auditors personally review it to discover any opportunities to save money on your premiums.

Once they complete their analysis and submit it, they submit the analysis and the original records to the auditor. Within the analysis, they even preemptively answer questions that the auditor may have about the business. Once submitted, they stay on top of it, and they communicate directly with the auditor and ensure that their audit aligns with their analysis properly.

Whether you work in healthcare, manage a sports team, or anything in between, these companies can work for you. Not only do they compile documents and upload them for you, but they make sure to personally review your policy. The experts ensure it’s treated fairly, with care, and that they get you the best savings possible. To take the burden off yourself and to focus on your business, let the insurance experts handle your insurance audits for you.

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