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The Other Side Of An Insurance Audit

October 13, 2019

Cecilia De La Rosa

Cecilia De La Rosa

You’re a busy contractor trying to build your business. You have to find new clients, manage your administrative tasks, and plan your work schedule. Then you get the message… your insurance company wants to audit your records. This immediately adds more stress to your already busy schedule. Preparing for an audit can feel like a hassle and a major inconvenience. Then, there is the concern that your insurance company will determine that you underpaid your premiums and you will need to immediately come up with a large sum of money to pay the premium. No, the process isn’t fun. Yes, it’s highly stressful. However, it doesn’t have to be a horrible experience. Insurance audits are a part of business for both you and your general liability insurance company.

There are a few things you can do to make the experience better and not give the auditor a reason to feel like they are despised or that you’re hiding something. Treating the auditor well can ensure that they do their work in a timely fashion and that you are a good business person. Believe it or not, auditors have a difficult job. They are not welcomed and many contractors are not prepared for the process. Anything you can do to make it simpler for them can only be in your favor. So what’s it like on the other side of the audit? What do insurance auditors need to make your life easier? Let’s discuss…  

Setting the Tone

The first and best thing you can do is set a positive tone so that when the insurance auditor arrives, he or she can get right to work. Being prepared is the first and best thing you can do.  

Be Prepared

You’ll want to have the following prepared and readily available:  

  • W-2s (employee payrolls)
  • 1099s (subcontractor payrolls)
  • Ledger statements
  • Certificates of insurance on your subcontractors
  • Job duties of your employees and subcontractors to make sure that they are properly classified according to insurance rules and regulations

By respecting their time, you give them a reason to respect yours as well. Many insurance auditors have negative experiences with contractors as they are not organized or prepared. By having your documents readily available, you give them a reason to feel you are cooperating with them and have nothing to hide. 

Quality Work Environment

When the insurance auditor shows up at your office, have a quite and comfortable place for them to work. You would be surprised how many insurance auditors have subpar working areas that either make it hard to concentrate. Make sure that either yourself or designated employee has cleared their calendar so that there won’t be any interruptions with phone calls, office meetings, etc. The auditor should be treated as a guest. Don’t make them feel like he or she is the enemy. Offer them the same courtesies that you would any other guest.


Auditors deal with their fair share of rude clients, just like you do. Negative or positive impressions can make a difference. By being courteous, prepared, and helpful you can create a positive environment for the insurance auditor. Remember, they don’t want to be their any longer than they need to be or is necessary. Their job is to ensure that you maintain adequate coverage and that you don’t find yourself uninsured when you thought you were… believe it or not, they are there to help you.

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