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Frequently Asked Questions

Premium Audit FAQs

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Premium Audit Frequently Asked Questions

What is an audit and why are they required?

Answer: The audit finalizes the policy cost. The audit takes estimated payroll and converts the policy premiums so they are based on actual payroll.Policy audits are required by Workers' Compensation law and the obligation is noted in every policy we write.

What is a voluntary audit or mail audit?

Answer: A voluntary or mail audit is an audit completed by the insured using audit forms that are mailed to them. The insured must submit this summary and return it back to us along with payroll-supporting documents to complete the audit endorsement. It is different from a physical audit because a physical audit is completed by sending an auditor to the insured's location to complete the audit for them in person.

What types of payroll documentation can be used to complete a mail audit?        

Answer:  We need the insured to complete the audit form and questionnaire, then return it to our office with their Federal 941 forms, state quarterly reports or a detailed payroll summary for the policy period as proof of payroll.

Do we include overtime in the audit, and if so how do we calculate the payroll?  

Answer:  Yes, we do include overtime in the audit, if there is overtime reported. We include 2/3rds of the overtime payroll to come up with the amount of straight time payroll. The same would hold true with double time. We include ½ of the double-time payroll to come up with the amount of straight time payroll.

**Please Note: 100% of overtime payroll is included in the states of PA, DE and NV**

If I have placed coverage with another insurance company am I still required to complete an audit?

Answer:  Yes, Audits are based on expired policies.  Every policyholder is required to complete an audit whether they are still insured by an AmTrust company or not.


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