General Liability Insurance Premium Audits Should Be Reviewed By Employers
General liability insurance premium audits should be reviewed along with the workers compensation premium audits. This type of audit usually occurs when the workers comp audits are being performed each year.
Earlier this week, I wrote an article on what external information premium auditors examine for workers comp audits. I could have easily added in the general liability audits. Make sure that you review that article.
The basic standard definition is: According to Chron.com
A general liability insurance audit occurs when an insurance agency examines the payroll records and income statements of a policyholder to determine if that policy represents an accurate rating of the company’s exposure to liability. A professional auditor, either from the insurance agency or from an independent office, performs the audit and assesses the company’s exposure. The results of the audit do not determine a company’s value or its tax rate, but they establish its level of protection from liability claims.
We have been offering reviews of these audits for over 5 years. We introduced that service in 2013.
If you as an employer question your workers compensation audit, the general liability audits go “hand-in-hand.” You may possibly want that audit reviewed in addition to the workers compensation audit.
The records required for general liability insurance premium audits are basically the same material. However, the classification codes are not from the same group. Except in rare cases, the codes are totally different – usually longer.
Very often we are asked to only look at the workers compensation audits and asked to ignore the general liability audits. Recently, with the employer profit margins (in many industries) shrinking, this area has generated more interest.
This is not an ad for our services. I wanted to call our readers’ attention to this oft ignored area. Please feel free to contact us if you have any questions on general liability insurance premium audits.
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6 Responses
We have a large framing contractor who is having great trouble with the way his debris removal crew is classified – they have to be included in the carpentry payroll which as you may know is a much higher rate. This contractor has a fetish about a clean jobsite. His debris removal staff do nothing but clean up, sweep and haul scraps of wood etc to a trash site. They do nothing in the way of using a hammer or whatever a carpenter does and frankly lack such skill.
Do you have any suggestions?
Thanks for your timely tips including ideas about audited payrolls for GL
Dick Coffey
Dick, there are so many deviations from the carpentry codes. The states that your client operates in would be the main determining factor. There are classification codes for debris cleanup that may possibly fit. Then again, the cleanup codes are so narrowly defined that it is tough getting the employees out of the carpentry codes. Those codes are all-encompassing. I would need to see more info before I could see if the debris removal can be placed in a different class code. Thanks for commenting.
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GA,
Thanks for the compliment. Check out our most popular page.
Great post, love your comments on premium audits.
Thanks Francis, Our definitions page has a large amount of Risk Management and Workers Comp terms.