Premium audits

When your policy began, your premium was based on estimated figures such as payroll, sales, or subcontractor costs. A premium audit is conducted after a policy period ends to verify the information used to calculate your insurance premium and confirm your actual figures.

A premium audit helps ensure premiums are accurate based on actual business activity and confirms that employee classifications and operations are correct. The audit also helps to:

• Keep your policy compliant with state and rating bureau requirements
• Capture business changes like new employees or locations
• Support accurate claims handling

The audit ensures changes such as new staff, services, or expanded operations are accurately reflected in the policy, helping prevent future discrepancies or unexpected premium adjustments.

Avoiding or ignoring the audit can lead to financial consequences, compliance issues, and potential disruptions to your coverage. If you do not complete the audit, the insurance carrier may estimate your payroll, sales, or subcontractor costs and apply a surcharge of up to 200%. These estimates are often based on the highest reasonable exposure and typically result in a much higher premium than your actual figures would have produced.

Premium audits typically take place shortly after your policy expires or renews. You will receive a letter from one of SECURA’s authorized vendors informing you about the audit process, timeline, and required documentation for review.

Every SECURA policyholder undergoes a premium audit. Preparing in advance helps ensure the process is smooth, accurate, and completed quickly. Below is a guide outlining what to expect, what documents may be needed, and how to prepare your business.

SECURA’s premium audit vendors

SECURA partners with third party premium audit vendors to perform all audits. The vendors are:

• Information Providers Inc.
• RLD Associates Inc.
• Vista Resources

Each vendor will work directly with you on the audit.

Document review process

For the premium audit, you may be asked to provide documentation, such as:

• Job duty descriptions
  
  • Accurate classification helps ensure the correct Workers’ Compensation or General Liability rates
• Payroll reports
• Quarterly wage filings (Federal 941)
• State unemployment records
• Profit and loss or income statements
• Sales reports, if applicable
• Subcontractor records (certificates of insurance, payment amounts, work performed)
  
  • Missing certificates of insurance may result in subcontractor costs being included as payroll during the audit

Ensure all records correspond to the dates of the policy period. If your documents cover a different date range, include clarification or supplemental reports.

Prepare for questions about business operations

When you’re prepared, the process is more efficient and transparent, helping ensure your insurance premium accurately reflects your business activity. During the audit meeting, the auditor may ask about:

• Changes in staff or operations
• New locations opened or closed
• The type of work performed by employees and/or subcontractors
• Any expansion or reduction in services offered

After the audit

Once the audit is complete, we will calculate your final premium and deliver your audit results to your agent who will share the results with you and manage any next steps. You will have the opportunity to review the audit statement, request clarifications, or dispute specific items, if needed.

By completing your premium audit promptly and accurately, you help ensure proper pricing, compliance, and protection for your business. A smooth audit benefits both you and your insurance carrier and helps keep your coverage aligned with your real-world operations.