Your premium audit helps determine if your premium needs to be adjusted, to ensure that you are not paying more or less than necessary based upon your needed coverage.
Premium audit FAQs
As a business owner, you understand how fast a business can evolve and grow, year to year.
Your business’s insurance needs can evolve just as fast – the exposures you face at the time of your renewal may no longer be in line with the exposures you faced at the beginning of your policy term. To help ensure your policy premium matches the insurance coverage you need, we perform an annual premium audit for workers’ compensation and other commercial insurance policy types.
We need your participation to ensure our information and your premium are both accurate. To help you prepare for your audit and provide you with an overview of what to expect, we’ve put together resources, tips and FAQs.
What is a premium audit?
Your policy premium—what you pay—is based upon information provided by you and/or your insurance agent prior to the start of your policy term. A premium audit compares this information against the level of exposure your business faces in the course of operation—payroll, sales, employee classifications, use of sub-contractors, and more—to verify that your premium accurately reflects this level of risk. This is a standard industry practice.
Why am I being asked to participate in a premium audit?
Prior to the start of your policy, your agent and a Hanover underwriter estimated your premium based on your expected business operations. At the end of your policy period, an in-depth review of your operations is needed to determine if premiums were correctly estimated. Your premium will then be adjusted based on actual business outcomes. Your participation is essential to ensure your premium is calculated correctly, and is required by your policy.
What to expect from your premium audit
The premium audit process is determined based upon multiple factors, including policy type, premium, complexity, and state regulations. These factors will determine the type of audit required, and whether the process will be completed in person or by sending records electronically.
- An in-person audit would require you to be on-site to provide records, answer questions and possibly provide a tour of your facility.
- An electronic audit may be conducted over the phone, email or both.
Based on the findings of the audit, your premium may need to be adjusted accordingly, to ensure that you are not paying more or less than necessary based upon your needed coverage.
More frequently asked questions
- How does the premium audit process work?
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Either in person or by sending records electronically, a process determined based upon multiple factors, including policy type, premium, complexity, and state regulations. An in-person audit would require you to be on-site to provide records, answer questions and possibly provide a tour of your facility. Audits utilizing electronic records may be conducted over the phone, email or both.
- When will my audit take place and how will I be notified?
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You should expect contact from an auditor no later than 15 days after the expiration date of your current policy. This could be in the form of a letter, phone call, or an email.
- Who will conduct my audit?
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Your audit will be completed by either a Hanover employee or an auditor from one of our vendor partners. All auditors will specify that they are representing The Hanover, and have been asked to conduct a premium audit.
Your auditor’s name and phone number should also be visible on your audit statement, which can help in the event of a missed deadline or dispute.
- Will the premium audit affect what I pay?
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Based on the findings of the audit, your premium may need to be adjusted accordingly, to ensure that you are not paying more or less than necessary based upon your needed coverage.
- Can I opt out of a premium audit?
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No. The Hanover, as a business insurance provider, is required in many states to conduct an annual premium audit for certain coverage offerings. These include workers’ compensation, general liability, commercial auto and more.
Please note that a failure to comply with an audit could result in an automatic increase of policy premium. This is known as an estimated audit.
- Will my data be kept safe?
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Yes. All transmitted data is sent to a secure portal or via encrypted email.
- I missed the deadline to submit my audit documents. What do I do next?
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If you have received an estimated audit or believe that you have missed the deadline to submit your documents, please reach to your insurance agent, who will work directly with us to have the audit reopened.
- If I disagree with the results of my audit, what do I do next?
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If you believe there is a discrepancy on your audit, please reach to your insurance agent, who can work with us directly to resolve the issue.
Contact your local Hanover agent with any questions regarding the premium audit process.