answers to your 3 most asked premium audit questions
March 24, 2022 Corporate News

Answers to Your 3 Most Asked Premium Audit Questions

“Audit” – you hear this word and you may feel stress or anxiety. We get it. However, a premium audit is an audit that can help your business. This article will explore the answers to the three most frequently asked questions surrounding a workers’ compensation policy premium audit like why you need to complete it and what records you need to prepare for a premium audit. You will learn that the premium audit process really isn't that bad or something to be dreaded, and is really performed to protect your business.


Before we answer the three most asked premium audit questions, let's explain what a premium audit is. A Premium Audit is a comprehensive examination of a policyholder’s records and operations to determine the actual earned premium for the policy period. The Premium Audit verifies the accuracy of pertinent policy information such as business operations, business locations, business ownership, policy classifications, and payroll.

Top 3 Asked Premium Audit Questions:

Why do I need to complete a premium audit? 

At the beginning of your policy period, your premium was estimated based on information about your business operations and payroll. The Premium Audit is completed once the policy has expired to determine your actual earned premium for the policy period. The premium audit makes sure you pay the correct premium amount and get the workers’ comp coverage your business needs.

What records do I need to complete my audit? 

You will need to provide the following information for your premium audit. Luckily, it is information that you most likely have quick access to such as:

  • Payroll Register that coincides with your policy period, which includes all employees (active and terminated) and shows gross payroll for each employee, which includes all payroll, overtime, tips, etc. 
  • Tax Records like your quarterly Payroll Tax returns, Rhode Island DET-TX-17s, and Federal 941s  
  • Subcontractor Records if you utilize subcontractors to complete work for you, payments made to subcontractors along with certificates of insurance.   
Depending on your business, additional information may be required as deemed necessary by the auditor. 

Do I need to complete a premium audit if I am on Pay As You Go (PYG)?

Yes, if your policy is on a pay-as-you-go (PYG), an audit will be completed to verify the accuracy of the uploaded payrolls, to determine the actual earned premium for the policy period. 


Want to Learn More about Premium Audit?

This article only answered the three most asked premium audit questions, and we know that you may have additional questions regarding your audit and would like more information regarding: 

Beacon Mutual
Written by

Beacon Mutual

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