Audit overview
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As your policy is about to expire, make sure to gather all relevant records and documents to calculate your final premium: payroll, sales, subcontractors, OCIP/Wrap up projects records as well as any additional financial information that will help with determining the correct risk classification and amount for your coverage needs.
Make sure that the records are reflecting the information within your policy period. If you are performing different tasks, make sure a separation of payroll is done by duty, so the appropriate amount is charged for each classification.
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Once the records have been reviewed, our audit team will update your policy accordingly. Once processed, the audit statement will generate the next day with the results and will be mailed to you. The billing impact on the audit period will reflect 14 days after the policy is updated. We may also update your current term policy.
If you see any discrepancies or do not agree with the audit findings, please contact our audit department to start the dispute process.
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When we mail out the premium audit form, we ask for the appropriate information needed depending on the exposure on your policy: payroll, sales-based, or other. Common financial documents requested are payroll records, 941s, W2 forms, Quick books reports, unemployment reports, profit and loss statements for the audit period. We may also request an annual 943 (applicable for Farm/Agricultural operations), as well as 941s and/or state unemployment reports for the most recent four quarters corresponding to the audit period. Please do not include any social security numbers. Submitting your report without such verification will require us to issue an audit on a non-productive basis. Premium cannot be returned without verification.
If your business used subcontractors, we will ask for the subcontractors’ certificates of insurance and the total cost for all work performed by anyone other than direct employees during your policy period (this includes 1099 laborers, independent contractors, casual laborers, subcontractors, etc.). We will request costs separated by labor and material/equipment furnished. Please note that breakdowns by percentages will not be accepted. You will need to provide proof of coverage comparable to your policy’s line of business (General Liability and / or Workers Compensation). The date of coverage must cover the period of time work was performed during your policy period. Coverage limits will also be reviewed to determine adequate coverage. Adequate insurance means the subcontractor carries liability coverage and limits of no less than $1,000,000 each occurrence/$2,000,000 general aggregate/$2,000,000 products-completed operations aggregate for the period of time the work was performed for you. Any limits less than the above will be considered inadequate and payroll charge will be included on your audit.
Most state Workers Compensation laws will hold you responsible for injuries sustained by an employee of an uninsured subcontractor. You may also be responsible for the legal liability of your subcontractors. To protect yourself, be sure to secure a Workers Compensation Certificate of Insurance from all subcontractors prior to the subcontractor beginning any work on behalf of your business. If no evidence of insurance is available, the subcontractor’s payroll may be added to your premium base as payroll. Depending on state law, if a person is claimed to be a subcontractor, but they do not have their own employees and their duties closely resemble those of an employee of yours, that person may be considered an employee for audit purposes.
Payroll: Many of the premiums for your insurance are based on payroll which is defined as total remuneration. Remuneration includes: Wages, Commissions, Bonuses, Overtime Pay, Holiday Pay, Vacation Pay, Sick Pay and Payment for Piece Work
Overtime: The amount paid in excess of straight time can be deducted if the excess can be verified by your records. Your records must show overtime separately by employee and totaled monthly and quarterly. This is not applicable in PA (WC) and DE (WC)
Division of Payroll: Division of an individual employee’s payroll to more than one classification is not allowed. Exception: For construction or erection operations, the payroll of an employee may be allocated to each type of work performed if proper records are kept. Payroll cannot be divided between construction of office or sales classifications. Please note that classification breakdowns by percentages will not be accepted.
Gross Sales: Sales information must be kept separately for each location with monthly and quarterly totals by the type of product sold. Please note that classification breakdowns by percentages will not be accepted.
On the audit form we will give the appropriate contact information to mail, email, or fax back the audit information. If completing the audit via the enclosed forms, please use black ink
Mail: Premium Audit
PO Box 182069
Columbus, OH 43218-2069
Email: AuSuMPAM@nationwide.com
Fax: 855-393-9727
You can start with our audit department at 1-800-243-2890 or Email: AuSuMPAM@nationwide.com
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- When providing audit information or documentation, please do not include any Non-Public Information or Personal Protected Information such as: Social Security Numbers, Taxpayer Identification Numbers, PIN, banking or credit card information, etc. This information should be redacted prior to submitting audit documentation.
- If completing the information online via the website above for multiples Lines of Business, please check the “Forms” drop-down to ensure that all applicable forms were completed prior to submitting.