Heading up a business can often feel like keeping everything in check while your hair is on fire. Oftentimes, especially for startups, this can mean doing as much as you can by yourself to make sure it’s done right. However, certain aspects of business carry so much importance that it’s often best to leave them to the professionals. If your business runs into legal issues, it’s best to leave it to lawyers and legal experts. However, the same is also true for your business’s insurance.
Historically, when your insurance company audited your insurance company’s premium, you were required to provide the necessary documents and let the auditing be done entirely by them. Oftentimes, auditing occurs annually near the expiration date for commercial policies, but this is not always the case. Insurance carriers can elect to audit your policy around 90 days after the policy’s expiration date. Regardless of when it occurs, these audits are very important as they ultimately determine the insurance premium your business pays. So what exactly goes into these audits?
In an audit, you need to determine documents proving your income, expenses, the scale of your business, and much more. However, there are factors outside your business that have a bearing on the price. The rates applicable to your business type and proper classifications, for instance, can cause an increase or decrease in premium. Sometimes, even the auditor’s bias can tilt the cost of your insurance. For this reason, it is estimated that 25-50% of business owners with insurance policies may have been overcharged at some point during their audit process. Annually, workers’ comp premium costs $55 to $60 billion, with as much as 20% of that cost being lost due to an overcharge.
So, what documents do we need to present to ensure we get the best price? Firstly, they want to show your business’s liabilities in the form of payroll journals, summaries, and individual earning records. Additionally, any cash disbursements to subcontractors or miscellaneous sources would need to be presented here as well.
Next, they want to see cash receipts, with monthly totals by source and any non-recurring charges like service and repair. Finally, your insurance company needs your tax records for both the federal and state levels. These tax records must include income statement reports, corporate returns, and gross sales. Finally, any current certificates of insurance for general liability, workers’ compensation, or other commercial insurances, alongside the limits of coverage, are required for your audit. Once you finally compile that daunting list of documents, your audit may come to a close.
Fortunately, the rise of artificial intelligence has made the job of policy auditing much easier. With modern AI technology, premium trends and potential impacts can be predicted ahead of time. This also means any anomalies in the numbers can be detected easily as well. By using AI instead of just a person auditing a policy, the likelihood of inaccuracies and expensive increases in policy premiums is drastically reduced. This approach also boosts the accuracy and reliability of the data when conducting policy auditing.
Fortunately, policy auditing has become even easier with companies like AdvoQates. These companies take over the audit process and work on your behalf to simplify the process for you. Firstly, they establish themselves as the primary point of contact for the auditor, to ensure correspondence moves as quickly as possible. This step also reduces the amount of miscommunication between the auditor and the insured.
Next, your policy audit assistants will help you gather all the necessary records for this audit. Once they help you gather everything, they thoroughly analyze all documentation and classifications in order to determine where you might be overcharged. The team of experienced auditors is actively searching for deductions and exemptions specific to your business that could save you costs on your premium. After the analysis is completed, all the data is compiled and the analysis as well as the analysis is submitted to the auditor. By including the analysis, they ensure that your business has the proper classifications and that any questions from the auditor are answered preemptively, speeding up the audit process. Finally, your audit assistants actively engage with the insurance company’s auditor to ensure it accurately aligns with the report submitted.
Ultimately, regardless of whatever industry you find yourself in, getting your policy audit done is expensive in both time and effort. Whether it’s submitting documents or staying on top of auditors, it’s rarely an easy process. The best way to make sure it’s done quickly and done right is with the help of audit experts at AdvoQates.