In the world of business, it’s often said that time is money. That’s why paying money and outsourcing to an expert can be the smartest decision for your business. If you run into legal trouble or need legal help, you contact a legal expert for your business. Similarly, when it comes time for your business insurance audit, it’s best to contact an insurance premium audit expert. But why is such an expert even necessary?
Business insurance premiums are based on an estimate of how much a business would cost to be covered. Since it is highly speculative, it makes sense that these estimates are different from the actual cost. As a result, policy audits are conducted to help rectify this discrepancy. Traditionally, these audits occur when your commercial insurance expires, but it can be as far as 90 days after the expiration of the policy. So when you overpaid on insurance, you’ll receive a refund as a check or a credit on your next policy. But when you underpay, you’ll have to pay a bill to pay the difference.
So what kind of factors might affect your policy’s premium? Aside from your business’s financials, there are certain rates and classifications that are specific to your business. In addition, there are certain intangible factors such as auditor bias that can distort the price. These small adjustments can add up, and it's estimated that as many as 50% of business owners have been overcharged at some point during their audit. In the $58 billion worker’s compensation industry, that can mean as much as 20% of the premiums are lost simply due to overcharging. So what documents do you need to properly prepare for your audit?
An audit usually tries to establish your business’s expenses and revenue sources. For expenses, they would need a payroll journal, along with a summary and individual earning records. Additionally, they would need all your cash receipts, to measure where your cash goes every month and any service and repair bills during the year. Secondly, they need to track your cash disbursements by account and all money spent on subcontractors. For revenue, they track both state and federal tax records for income statement reports, gross sales, and corporate returns. Lastly, you need to provide current proof of commercial insurances, such as general liability and worker’s compensation.
As you can imagine, getting all these documents together can take a lot of time. This is where companies like AdvoQates come in. AdvoQates helps you get all your records together and submits them on your behalf. Moreover, they actively communicate with your company’s auditor for you so that you won’t have to worry about constantly responding during the audit. They even have their own team of experts analyze your documents, to ensure that you get the best classifications and largest amount of deductions possible. Once they create their report, they submit it to the auditor and ensure that the insurance company’s audit aligns with their report. Regardless of what industry your business is in, taking advantage of companies like AdvoQates makes sure that your policy audit is handled as swiftly and accurately as possible.
