{"id":2107,"date":"2023-10-24T23:40:27","date_gmt":"2023-10-24T23:40:27","guid":{"rendered":"https:\/\/businessyield.com\/ins\/?p=2107"},"modified":"2023-10-24T23:40:28","modified_gmt":"2023-10-24T23:40:28","slug":"general-liability-insurance-audit","status":"publish","type":"post","link":"https:\/\/businessyield.com\/ins\/business-insurance\/general-liability-insurance-audit\/","title":{"rendered":"General Liability Insurance Audit: All You Need to Know"},"content":{"rendered":"

Before acquiring any insurance policy, it is critical to read all of the policy’s terms and conditions. This includes the monthly amount and level of coverage, in order to examine all aspects of an insurance claim. These include reviewing insurance paperwork and financial statements, determining risks and liabilities, and so on. This article provides a general overview of how to prepare a general liability insurance audit checklist for subcontractors and their services.<\/p>

General Liability Insurance Audit: Overview<\/span><\/h2>

Situations in business can quickly alter due to things like new rules from the government, improvements in technology, and staffing changes. This is why small businesses need to be ready to deal with these effects. There is a big effect on how these changes affect a company’s risk of liability claims. So, check the company’s general liability insurance policy to see if it covers enough and if the policy needs any changes to its payments, deductibles, or out-of-pocket costs.<\/p>

The auditor will need to see the company’s payroll details to figure out how vulnerable it is. The federal payroll tax records of the company are the best place to get this information. Another thing the inspector will do is check to see if the company’s records have the right categories for each employee. For example, a construction worker is more likely to be in dangerous situations than a database programmer. This means that the auditor has to look at each employee’s classification and figure out how much risk they are at based on their job tasks.<\/p>

General Liability Insurance Audit Subcontractors<\/span><\/h2>

Growing their business is something that all great companies have to do at some point. But choosing the wrong way to do this can cost a lot of money. If you have too many general liability audits to handle, you might think that hiring more inspectors is the best way to get them all done. That means you have to post the jobs, meet the people who apply, and train the people who get the jobs. You can hire ISG for general liability insurance audit subcontractors instead of going through all that trouble.<\/p>

In essence, an insurance company does a general liability insurance audit when they look at a policyholder’s salary records and income statements. This is to see if the policy gives a true picture of the company’s liability risk. A qualified auditor, who might work for an insurance company or a different office, performs the audit. The auditor figures out how vulnerable the company is. The audit reports don’t tell you how much a company is worth or how much tax it has to pay, but they do tell you how safe it is from liability claims.<\/p>

General Liability Insurance Audit Subcontractors: All You Need to Know<\/span><\/h3>

The inspection is carried out by the subcontractors you hire. All subcontractors must show you proof of insurance that covers workers’ compensation and\/or general liability for the time they worked for you. If you don’t have the certificate with you when the audit happens, then you, as the contractor or policyholder, have to pay the subcontractor’s workers’ compensation for the time they worked. <\/p>

This means that builders need all subcontractors to have workers’ compensation insurance, even if they don’t have any employees and are just working for themselves. If they don’t, you will have to pay the fee. Also, when a subcontractor gives a Certificate of Insurance as part of a PEO lease deal, there may be a coverage gap. If the company doesn’t tell the PEO about workers or freelancers who don’t have insurance, those people could be found out. It’s possible to think of claimants as your legal staff, and you’ll find this out during your final audit. To handle this,<\/p>

#1. Let Individual Subcontractors Off the Hook <\/span><\/h4>

In Florida or Tennessee, contractors can only exclude themselves from workers’ compensation benefits as an individual. Any kind of exemption has to be reported to the state, and the time it was good has to be before coverage began.<\/p>

Since the exemption only applies to the individual contractor, any workers, employees, or uninsured subcontractors that the exempt contractor hires can put your money at risk and may affect your policy price.<\/p>

#2. Exempt Workers Who Make More Than $100,000 a Year <\/span><\/h4>

An exempt contractor must provide either a Workers’ Compensation insurance certificate or documentation of the work performed or materials utilized within the policy period. In the absence of this data, the report might include some of the contractor’s payments.<\/p>

Lastly, the award you are given must be the real thing and not a fax or photocopy. It should say on the certificate that your company is the owner of the license. It is also suggested that you check with the subcontractor’s insurance company every so often to make sure the policy is still valid.<\/p>

General Liability Insurance Audit Subcontractors: Different types of audits <\/span><\/h3>

There are a lot of different ways to do a general liability insurance check. They are;<\/p>

#1. Using the Telephone <\/span><\/h4>

It is possible to conduct an audit via telephone. A conference call is scheduled in advance to collect all relevant data from the company’s books in accordance with this type. Most of the time, this call lasts 45 minutes.<\/p>

#2. Mail <\/span><\/h4>

In this case, the insurance company sends a formal email to the organization with a set of questionnaires that need to be filled out within a certain amount of time and sent back with the company’s financial papers.<\/p>

#3. Through an Electronic Route  <\/span><\/h4>

When a business is asked to submit its financial documents online for this type of audit, it does so through an online portal.<\/p>

#4. Person to Person <\/span><\/h4>

This is one of the most common ways that surveys are done. One way for a professional auditor to look over all of the company’s paperwork and important papers is for them to walk through the building. Most of the time, this kind of audit takes two hours.<\/p>

How to Prepare for a General Liability Insurance Audit<\/span><\/h2>

It’s not as hard as it might sound to do a general liability check. The insurance company wants to make sure that they understand certain aspects of your business’s finances and dangers. There is a good chance you will get a letter one to three months before the end of your policy’s term telling you about the audit. Hence,  it’s important to quickly agree with the audit request so that your insurance coverage doesn’t end.<\/p>

One good thing about a general liability insurance check is that it will help you figure out how much coverage your business needs. If you think the amount of your premium is too high for the coverage you need, then you might be able to find insurance from a different company that covers the same amount for less money.<\/p>

How to Prepare for a General Liability Insurance Audit: What To Include<\/span><\/h3>

Having the necessary documents and information can prepare you for a smooth general liability insurance audit. Some documents you may need include:<\/p>