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
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