Unfortunately, many of us sign up for “buy now – pay later” systems on our purchases and fail to realize the consequences. Even if you could not be more pleased with your product, these unexpected charges and bills come as a surprise to many. Many business owners find themselves in a similar situation when it comes to their auditable insurance policies. Certain business insurance policies come hand-in-hand with audits, to ensure that all information is accurate.
Business insurance policies that are auditable include workers compensation and business interruption. Since the insurance carrier must be prepared to tend to these insurance claims once they arise, they often choose to audit a company to ensure that the amount and type of employees listed is accurate, and that the growth of your company is accounted for. For example, if your small business has experienced significant growth over the past two years since you initially purchased your policy and you have failed to update it, you may receive an audit notice. This is because the insurance company needs to increase your premium in order to cover business interruption expenses.
As a business owner who is busy focusing on business operations, it is a good idea that you either designate someone to manage your commercial insurance policies or set a calendar reminder for when an update is needed. Your auditable policies are subject to an audit every three years, and the only way to avoid an unexpected premium increase is to keep your insurance provider updated.
Contact Hoffman Brown Company in Sherman Oaks for all of your California business insurance needs. Our experienced team of professionals understands that not everyone is insurance savvy and many need guidance in navigating these policies. We will go above and beyond to disclose all pertinent information from the get go so that you are always in the know!