SFM conducts premium audits for all policyholders at the end of each policy period.
Many factors can change in your organization throughout the course of a policy period. Premium audits verify that premiums are fair and accurate at the end of this period.
The purpose of a premium audit
The workers' compensation premium your organization is billed at the beginning of a policy period is actually an estimate. This estimate is calculated using:
Classifications describe the nature of your business and reflect different levels of injury risk.
Your organization's payroll can change throughout the year if your workforce grows or shrinks, employees work overtime, or your organization expands or diversifies operations.
When a policy period ends, an audit of the past policy period and classification(s) is conducted, and the billed premium is adjusted to reflect any changes.
The final premium might be more or less than the billed premium. If the premium estimate was too low, the policyholder is charged additional premium. If the estimate was too high, the policyholder is reimbursed the extra premium.
Depending on the size and complexity of your organization:
Be preparedTo make sure your audit goes smoothly: