What is a premium audit?

[Ethan]

I was asked to complete a premium audit and I’m not fully sure what it involves. What is a premium audit, why do insurance companies do it, and what documents do I need to provide to avoid issues?

 

[inshya]

A premium audit is an inspection, which is made by an insurance company of the real payroll, sales, or operation of a business within a policy period. It seeks to make the insurance premium price assumed reasonable in terms of the actual amount of risk and cover taken.

 

[Emly]

A premium audit is a review by an insurer to verify business details (like payroll or sales) and adjust insurance premiums accordingly.

 

[David Williams]

A premium audit is used to check the actual operations and payroll of a business to verify that the insurance premiums were correctly calculated on the basis of actual exposure to risk.