Premium Audit 

According to your insurance policy, we have up to three years after the expiration date on the policy in order to conduct an audit. The vast majority of audits are completed a few months after the expiration date.

Keep detailed records. It will be to your advantage to:

• Show payroll with summaries by employee, by department, and by class code.

• Provide clear information on the type of work or job duties each employee completed during the policy term.

• Keep up-to-date certificates of insurance for all subcontractors used. (This applies to Contractors.)

• Show sales information type by week or month.

• Provide receipts and costs by type and by source.

The rules vary by state. Each state decides which rules to apply by statute. These rules are found in the basic manual for each state. The interpretation of rules are from the Premium Audit Advisory Service (PAAS) which is an independent industry organization dedicated to the fair and consistent treatment of audit issues. There are also some Acuity company procedures that are based on common practices found throughout the property and casualty insurance industry.

In your Workers’ Compensation policy, owners, officers, partners, and members can elect to be covered or elect not to be covered depending on the rules that vary by state. This must be done before the policy is issued. Your agent can show you how to do this. You do not have this choice under your General Liability policy.

If the owner, partner, officer or member is covered under the policy, those wages will be included at either a fixed amount or a variable amount subject to maximums and minimums depending on your state rules for your business type.

According to state rules we are required to show an annualized payroll instead of actual payrolls. There also is a “short rate” cancellation charge. Individual rates are adjusted on the statement to make the final premium appropriate to your reported payroll.