According to your insurance policy, we have up to three years after the expiration date on the policy in order to conduct an audit. The vast majority of audits are completed a few months after the expiration date.
Keep detailed records. It will be to your advantage to:
The rules vary by state. Each state decides which rules to apply by statute. These rules are found in the basic manual for each state. The interpretation of rules are from the Premium Audit Advisory Service (PAAS) which is an independent industry organization dedicated to the fair and consistent treatment of audit issues. There are also some Acuity company procedures that are based on common practices found throughout the property and casualty insurance industry.
In your Workers’ Compensation policy, owners, officers, partners, and members can elect to be covered or elect not to be covered depending on the rules that vary by state. This must be done before the policy is issued. Your agent can show you how to do this. You do not have this choice under your General Liability policy.
If the owner, partner, officer or member is covered under the policy, those wages will be included at either a fixed amount or a variable amount subject to maximums and minimums depending on your state rules for your business type.
According to state rules we are required to show an annualized payroll instead of actual payrolls. There also is a “short rate” cancellation charge. Individual rates are adjusted on the statement to make the final premium appropriate to your reported payroll.
Audit payroll is called remuneration in the basic manual rules. Remuneration means money or substitutes for money.
Remuneration can be defined as “the total remuneration for services performed by an employee.” This may be money and substitutes for money and includes: y Wages and Salaries (including retroactive wages)
When preparing for your audit, refer to these helpful tips: