How To Prepare For An Insurance Audit Although audits are for your own good, they scare a lot of people. Follow these tips to chase your audit fears away.

If you have business insurance, it's probably going to happen: Your insurance company will conduct an audit. Insurance companies conduct audits to make sure the premiums you're paying are in line with the amount of coverage they're providing.

The initial contact from the auditor is either by phone or mail, and you're generally given a week or two to prepare. The auditor will let you know in advance what records need to be examined so you can have those documents available. In most cases, you can't deny the auditor access to requested records; chances are, there's a clause in your policy stating that by purchasing the coverage, you agree to the audit process. If the auditor finds evidence of fraud, it's reported to the insurance company and to the appropriate investigative unit of your state government.

Here are some tips to make the auditing process go smoother:

Have all requested records available. If, for example, certain records are maintained by your accountant, either bring them into your office or arrange for the audit to be conducted at your accountant's office.

Get certificates of insurance on any contractors not covered by your workers' comp policy. Be able to prove that any contract labor source doing work on your premises or on your behalf has coverage, or you may have to pay additional premiums based on those labor costs.

Discuss record-keeping procedures with your insurance agent and accountant. Proper bookkeeping may reduce your workers' comp premiums. When you pay overtime, for example, you may be entitled to a partial credit against your total payroll for those hours.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Business News

Your Old Apple AirPods Can Soon Act as an Over-the-Counter Hearing Aid, According to the FDA

The new software is compatible with the Apple AirPods Pro and accessible through iOS — for free and now FDA-authorized.

Business Ideas

70 Small Business Ideas to Start in 2025

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2025.

Growing a Business

What Our Digital World Is Missing — and How I Turned It Into $100 Million After Dropping Out of High School

I went from high school dropout to $100 million CEO by sticking to one very important learning principle.

Social Media

With This LinkedIn Algorithm Change, Your Best Posts Could Reach New Readers for Months

It's one of many new features rolling out on the platform in 2024.