left corner

Do You Know If You Are Under-Insured or Over-Insured?

Be Confident, Clear, & Have a Sense of Security That You Are Protected!
Download The 5 Things Your Insurance Broker Will Not Tell You That You Need to Ask.

 

RUN DMC and the Tricky Audit

Auditors are getting TRICKY (insert Run DMC music)

Harder market means more premiums any way a carrier can get it. Our experience has been that many auditors are beginning to ask, “Have you ever…” This great game can place outside sales people on factory floors, on top of roofs, and even underwater.

Take for example the recently completed audit of a wholesale cleaning Supply Company. . For the last few years, this 6-person company has been classed in 3 main categories. Outside Sales, Drivers, and Warehouse.

During the audit this year, the auditor asked the owner, “Have you ever worked at the counter”. The owner of course said yes and thus that one answer moved her from the outside sales classification to the warehouse classification generating a substantial audit premium for last term AND this term. For a small business owner, this hit of $2500.00 can be hard on the cash flow.

Our solution, review the audit with the insured, verify that she is still in the role of outside sales (I can personally attest to this fact) and then send a letter to my underwriter asking for the audit to be adjusted.

The letter we use is pretty standard; the names have been changed to protect the innocent.

Chad Underwriter

Re: 3326079987770E

10.11.2012

Chad:

I recently reviewed the work comp audit with Sue Cleaner of Cleaner and Cleaner.

The auditor indicates that Sue “works in the store front” and although this is true maybe once a month, Sue’s primary role in the company is outside sales. I’ve worked with Sue for a number of years and can personally verify that her role in the company is that of sales and not “counter work”.

When asked if she ever helped the counter, the honest answer would be yes, but comparing the exposure, Sue is 99% out in the field and 1% back at the shop working at her desk processing orders. She is at the counter .0091 %.

Please assist me in correctly classifying Sue’s payroll. I’d be happy to discuss via phone.

Thank you,

Anson Ross (Andy) Thompson

COO, The Thompson Group

This letter was sent with the audit work sheets and I’m confident that we can get this corrected for our long time client. Point of this blog is that this is happening more and more in this changing market. Make sure you work with your clients to help them understand their role in the company before the audit.

Oh my, as I’m finalizing this blog, I get this from my underwriter:

Andy, the request for revised 6/1/11-6/1/12 audit will be reviewed by the assigned Audit Clerk, Gwen Scruggs, for consideration. Thanks,

Chad Underwriter

Commercial Lines Underwriter

I’ve never done a blog series before, but this just might be the first time that as this situation develops, I’ll add additional information about how it turns out. This is like watching LOST or Dexter, you never know what might happen. Tune in next week for the results of the “Sue Cleaner Audit Episode”!

Next Steps:

Let’s talk about how we can review your current insurance needs and see where there are gaps.   Click HERE to schedule a free consultation call with us!

Contact Us

Click here to contact us for more information

Categories