Workers’ compensation premiums are typically based on estimates of your company’s payroll and employee data (i.e., job classifications), or projected gross sales over the course of your policy term. When an insurer conducts a premium audit, they’re trying to calculate your business’s final premium. In other words, they’re looking to see if the amount that you’ve been paying for your business insurance policy matches up with your company’s true risk level.
In most states, workers’ compensation and other types of business insurance policies require premium audits as a standard practice to assess risk levels and actual money paid. They can take place in-person or remotely via the mail or over the telephone.
