Helpful Tips to Prepare for Your General Liability - Sales Based Policy Premium Audit
Please review these tips to prepare for your General Liability Premium Audit. An accurate audit depends on having your records prepared for review.
What documents and records will I need for my premium audit?
You will be informed of specific documents needed prior to the audit, but in general: Individual Earning Records, General Ledger, or Financial Statements. Review the Required Documents section to see examples of documents and records needed which varies based upon your type of policy.
TIP: Maintain your records up to date during the policy term.
Why may I be asked to provide more than one document with the same information?
A Premium Audit representative must review information documented in sales records (primary source) and verify these against numbers recorded in tax forms (verification document). You may be requested to provide information from other data sources such as your sales journal, income statements or profit and loss statements, etc. to determine other income not reflected in the primary source document. These documents are confidential and only used for the purpose of completing the premium audit.
What if my sales records don’t line up with my policy period?
If your sales report doesn't match your policy term, you can round the sales report to the first of the month. For example, if your policy period is 6/15 - 6/15 you can provide sales for 7/1 to 6/30 or 6/1 to 5/31.
TIP: It is acceptable to deviate sales from the policy period by 30 days.
Will I need to provide my tax records?
Yes, we will need to review your tax records, such as State Sales Tax Returns, Income Statements or Federal Tax Returns. Your records are confidential and used only for the purpose of completing the premium audit. Visit the Required Documents section to see examples of documents and records needed which varies based upon your type of policy.
TIP: Keep copies of filed tax forms applicable during your policy term. If your policy period falls in the middle of the month, simply provide the most recent four filed quarterly (or annual) tax reports that most closely aligns with your policy period.
What should I do if I add a new entity, start a new operation or start working in a new state?
Advise your Agent or Producer. Your policy may need to be endorsed to reflect the new exposures. For assigned risk coverage, some states may not be added to your policy. Contact your Agent or Producer or company representative for additional information.
TIP: Inform the Auditor of changes to your operations. For assigned risk coverage, inform your Producer or company representative.