Premium Audit
Definition. Premium Audit is the annual review where your carrier verifies actual payroll, revenue, or other rating exposures and adjusts your premium up or down accordingly.
Also known as: Audit, Year-End Audit
Most Workers Comp, General Liability, and BOP policies are auditable. Carrier reviews payroll records (WC) or revenue (GL/BOP) at policy end. Under-reporting at bind triggers a back-bill at audit. Most owner frustration with commercial insurance traces to audit surprises.
Example
Restaurant estimates $200K payroll at bind ($6K WC premium). Actual end-of-year payroll: $310K. Premium audit bills back additional $3,300.
Sources cited
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📘 Educational content only.
Reviewed by California-licensed Property & Casualty insurance agent
Jason Wootton (CA License #0I94454). Not insurance advice, an individual recommendation, or a solicitation in any state. Insurance regulations vary by state. For specific coverage decisions, consult a licensed insurance agent in your state.
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