Sometimes factors that enter into determining appropriate premiums for insurance coverage can’t be known in advance; therefore, accurate premiums for the coverage provided can’t be billed by the insurance carrier. This often is true in the case of Workers’ Compensation and Product Liability insurance, where such things as payroll and sales can’t be determined ahead of time. An audit serves as an examination of the insured’s records after the fact to adjust the initial premium billed to reflect the actual coverage.
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