Many types of Commercial Lines insurance policies, particularly Workers Compensation policies, are subject to an audit at the completion of the policy term (even if the policy is cancelled). In some circumstances, the audit may even be done  during the term of the policy.

Audits are necessary because the policy premium is based upon an exposure that may vary during the time that the policy is in force. For example, Workers Compensation policy premiums are based upon total payroll in each of the different classifications of employees that a business employs during the policy term.

That number is initially established when the policy goes into effect. As the number changes during the time that the policy remains in force, the premium calculation changes with it. At the end of the policy term, those numbers are reconciled by the audit and the insurance company may owe a return premium to the customer, or the customer may owe an additional premium to the insurance company.

Those additional or return premiums are owed by one party to the other, regardless of whether the policy is still in force or not.

Use the links at left to access a number of web-based resources concerning the Premium Audit process, and please contact Companion if you cannot find the assistance that you need.