​Premium Audit

 

As your business operations change, so may your insurance premium. At Liberty Mutual Insurance, we conduct premium audits to make sure that the premium you pay for your coverage accurately reflects your business’s operations over the policy period. An audit doesn’t always mean a higher premium. In fact, it could be a positive experience for your company because it may lower your premium.

How It Works

Your policy premium is based on payroll or sales estimates you provide prior to your policy start date. At the end of the policy period, we review your records to determine your actual payroll or sales figures and to adjust the estimates based on these amounts. To calculate the final earned premium, we may come to your location or request that you send us the information.

Learn More

If you have questions about the premium audit process, please review the information below, including definitions of frequently used terms, or contact us for more information at the phone number or email address listed to the right.

Frequently Asked Questions

Mail Audit FAQs

Online Audit (eReport) FAQs

Physical Audit FAQs

Frequently Used Terms

You may encounter the following terms while providing information to us for your premium audit.

​Admissions
Total number of persons, other than working employees, admitted to an event whether by paid admissions, tickets, complimentary tickets, or passes.
​Cases
Total number of cases sold. A case of beverages is the equivalent of 12 bottles of 750ml capacity. A case of eggs is the number of cases processed.
​Certificate of insurance
​Evidence that your subcontractor had insurance coverage in place for the period that the subcontractor performed work for you.
​Description of operations
​Briefly describe your business operations. Include final product(s), process(es), types of customers, means of delivery, installation.
​Duties/job description
Briefly describe each employee’s daily duties (e.g. payroll clerk, carpenter, shop). To be considered clerical, an employee MUST be performing general office work at a workstation that is physically separated from the following: work or service areas, areas where inventory is located, areas where products are displayed for sale, or areas where customers bring products for payment.
​Employees
List each employee on your payroll and for whom you withhold taxes. Show casual, day labor, leased employees, and temporary labor separately in another question on the form.
​Federal 941
​Employer quarterly federal tax report that most companies file with the federal government showing gross payroll paid to employees. If you do not file 941s, you may use your Form 1040 Schedule C Profit or Loss Form Business (pages 1 and 2), a profit and loss statement for the audit period, or another form of income tax return (Form 1120, Form 1120S, or Form 1065) or other similar state quarterly tax documents that show wages paid.
​Full time
​Twenty hours or more per week; part time is fewer than 20 hours per week.
​Gallons
Total number of gallons sold. For propane, if the number of gallons is unknown, estimate the number of gallons by dividing the total sales by the average price per gallon.
​Gross overtime
​Amount paid for hours worked for which there is an increase in the rate of pay. This amount should already be included in the gross payroll. If overtime is paid at any rate other than time and one-half, please note it on the form.
Gross payroll
​Amount paid to employees before any deductions such as employee savings, retirement, or cafeteria plans. Gross payroll includes wages or salaries; commissions; bonuses; overtime; and pay for holidays, vacations, or periods of sickness. It also includes the value of housing provided to employees. You may exclude the following items from gross payroll: gross overtime portion of wages (not applicable in Delaware, Nevada, Pennsylvania, and Utah), tips, and dismissal or severance earnings. The following state-specific exclusions also apply (these exclusions are applicable to workers compensation policies only):
  • California: Amounts withheld for section 125 cafeteria plans by the employees
  • Kansas: Earnings for vacation, holiday, and sick pay
  • Oregon: Vacation pay and unanticipated bonuses
  • South Dakota: Earnings for vacation, holiday, and sick pay
  • Tennessee: Unanticipated bonuses 
​Ownership
List each owner, partner, officer, or member as shown in the operating agreement, corporate charter, or bylaws. Note if any are inactive. Provide duties and gross payroll for the policy period shown. We will make the appropriate adjustment in accordance with state payroll limitations.
​Rounds
Number of persons playing. A round is either public or private and nine holes or 18 holes as indicated by the class code on the form.
​Sales
​Amount charged by you, your concessionaires, or by others trading under your name for all goods or products sold or distributed, operations performed, and rentals. This includes foreign sales. Do not include sales taxes or excise taxes that are collected and submitted to a governmental division, credits for repossessed merchandise and products returned, allowances for damaged or spoiled goods, finance charges for items sold on installments, or freight charges if freight is charged as a separate item on your customer’s invoices.
  • Restaurants: Gross sales should reflect all food and beverages, including alcoholic beverages.
  • Property management fees: Include the amount received from the property owner for services rendered. Do not include rental fees collected on behalf of the property owner.
​Stop gap
Sum of the total gross payroll for all employees (including officers) as disclosed on the filed tax forms that most closely align with the policy term being audited.
​Student
Average daily attendance for day sessions only, not including summer sessions.
​Subcontractor cost
Total cost of all labor, materials, and equipment that are furnished, used, or delivered in order to execute your work.
​Weeks employed
Number of weeks each employee was employed during the policy period, including vacation and sick time. A partial week is considered a full week. Use the hire and termination dates for those employees who were not on the payroll during the entire policy period.

 

​Premium Audit Questions

If your policy number is in the 15-character, alphanumeric format (e.g. WCC-123-456789-015):

1-800-231-3484
E-mail
Online Request Form
Fax:
1-603-422-0144 (Mail Forms)
1-603-334-0291 (Disputes)

For all other policy number formats:

1-888-224-9246
Email
Online Request Form
Fax: 1-800-800-3723