Insurance Audits

More often than not, a large majority of commercial insurance is based upon a percentage of your sales and/or payroll for the year that the policy is effective for. Soon after your policy expires, you will be asked to provide a voluntary report from your sales/payroll records, or a field auditor will physically come in and review your bookeeping. Basically, this indicates that the preliminary premium you are quoted is simply an estimate of your actual cost. You may encounter insurance agents who ?lowball? your premium to make it seem that you're getting a deal. Unless you can confirm the actual percentage and payroll or sales figures being used, you may find some time later after the service year that you owe a large additional premium. The insurer and agent have done their part and now it is your turn to pay up. Majority of the time, insurance companies collect these premiums with ease; on the legal side, it is in their favor. On the other side of the spectrum, your actual figures are less than what is used to determine your initial premium. In this case, you should seek a refund.