Premium Audit
General Information
Your Workers’ Compensation and General Liability policies
were issued according to estimates you provided of your payrolls
or sales for the year. At the end of each policy year,
Builders Mutual may contact you to conduct a physical examination
(physical audit) of your accounting records in order to determine
your actual payroll or sales.
If you are contacted by a Builders Mutual audit representative,
the representative will explain the records you need to have
available for the audit and will make an appointment to meet
with you or a company representative. It is important that
the company representative meeting with the auditor be thoroughly
familiar with all company operations during the policy year;
this will allow the audit to go smoothly.
On occasion, we mail a worksheet with instructions for you to
complete and return to BMIC in lieu of conducting a physical
audit at your office; therefore, you may receive a request through
the mail asking you to complete this “voluntary audit.”
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Preparing for an
Audit
To prepare for a physical audit, you will need to have the following
records available for review:
- Books of original entry (payroll journals and/or individual
earnings records)
- Federal and state employment tax reports
- General ledger
- Cash disbursement journals (or checkbook)
- Certificates of Insurance for subcontractors (certificates
must cover the time the subcontractor worked for you); for
General Liability, subcontractors must have limits of at least
$300,000 per occurrence, $600,000 General Aggregate and $600,000
Products/Completed Operations
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Additional Information
to Consider
- Overtime
If you pay overtime, the extra payroll may be excluded from
the basis of premium provided your records show overtime
payroll listed separately by employee and in summary by classification. For
example, if you pay time and a half for overtime, the amount
you may deduct is 1/3 the extra pay.
- Ask the auditor
If you have questions concerning the information needed for
the audit, you may contact the auditor prior to the scheduled
appointment for clarification.
During the audit, if you have
any questions, please ask. Your
auditor is available to answer any questions you may have.
- Disagreement with
the “Final Audit Statement”
You have 15 days from the date of the Final Audit Statement
to dispute or question your audit. If you believe that
the Final Audit Statement contains incorrect exposures, you
should contact the Premium Audit Department in writing and
provide documentation to support your dispute.
Builders Mutual Insurance Company
P O Box 150005
Raleigh, NC 27624-0005
Fax: (919) 845-9382
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QuickBooks® Instructions
BMIC does not endorse the use of QuickBooks® for
record keeping purposes. These instructions are intended
to be used as a tool if you use QuickBooks® software.
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Premium Audit
Workers' Compensation Classification Process
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Premium Auditors
North Carolina
South Carolina
Tennessee/Nashville/Memphis
Virginia/Tidewater
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