The term “Audit” sounds intimidating, we know. But premium audits in the insurance business are a routine practice that actually benefits customers by ensuring that the premium charged for your insurance policy accurately reflects your business operations. At Millers, our goal is to make the premium audit a positive experience for our customers by keeping the requirements simple and helping you understand the premium audit process.
What is the purpose of a premium audit?
The purpose of a premium audit is to calculate an accurate premium for the exposures covered by your Millers Mutual insurance policy. When your policy is issued, the premium charge is estimated based on historical records for your business operation (for example, estimated/historical payroll or estimated/historical sales revenue). At the end of the policy term, a premium audit is conducted to determine your actual exposures during the policy period and to adjust your premium accordingly. Simply put, we’re just trying to make sure the premium charged for your insurance policy accurately reflects changes in your business operation that occurred during the policy year.
What types of policies are subject to a premium audit?
Insurance policies with variable or fluctuating exposures – such as payroll, sales revenue or admissions – are generally subject to an annual premium audit. Millers is required by state law to audit all workers compensation policies. Many general liability and some business owners policies are also subject to periodic premium audit.
How often does Millers conduct a premium audit on my policy?
Premium audits are conducted annually, usually within 30 days after the expiration of the policy term.
Who conducts premium audits for Millers Mutual?
Depending on the nature of your business and size of your insurance policy, Millers conducts three types of premium audits:
Self Audits – For a self audit, Millers sends notification directly to your insurance agent requesting updated exposure information (for example, current annual payroll figures, annual sales receipts, etc.). Your agent should contact you to obtain the necessary information and will then forward that data to Millers on your behalf.
Telephone Audits – Telephone audits are conducted by RLD Associates, a third party professional services firm contracted to conduct premium audits on behalf of Millers Mutual. Depending on the nature of your business, RLD Associates may call and ask you to provide information via telephone or they may send you a premium audit questionnaire in the mail.
Physical Audits – A physical audit involves an on-site review of your business operations. If your business qualifies for a physical audit, Millers will notify you directly and you will be contacted by a representative of RLD Associates – a third party professional services firm contracted to conduct premium audits on behalf of Millers Mutual. RLD’s representative will explain the audit process and let you know exactly what must be reviewed when they visit your business at a time that is convenient for you. That way, you can compile the necessary documents in advance, and RLD’s representative will be in and out in no time.
What information will I be asked to supply for a premium audit?
Depending on the nature of your business and the type of audit being performed, you may be asked to supply documentation including, but not limited to, the following:
- A description of your business operations
- A list and description of all operating locations
- Number of employees, employee names and job duties
- Payroll records – total amount of wages paid including base pay, bonuses and commissions, vacation and holiday pay, sick pay, and overtime pay
- Gross sales revenue – total amount charged for goods and services including product rentals, dues and fees
- Admissions – number of individuals admitted to an event or venue
- Tax documents or financial statements – to verify reported sales and payroll figures
- Other supporting documentation – as requested by the individual conducting your premium audit
Will my premium go up after I complete a premium audit?
In some cases, additional premium may be due if your actual exposures (payroll, sales revenue, etc.) are higher than the initial estimate used to calculate your premium charge. In other cases, you may be entitled to a partial refund of premium paid if your actual exposures are lower than the initial estimate.
What happens if I do not respond to Millers’ request for a premium audit?
Premium audits are an important and compulsory part of the insurance transaction. If you receive a self audit form in the mail or a request to speak with a representative of RLD Associates (our third party premium audit provider) – we ask that you please respond in a timely fashion. If Millers is unable to obtain the information needed to complete a premium audit, we may cancel your insurance policy or increase your premium based on a revised estimate of your current exposure values.
Who should I contact to discuss the results of a premium audit?
If you have questions about the premium audit process or the results of an audit that has already been completed, please contact Customer Service at 1.888.714.7313.