Stay ahead of audit surprises and keep your business protected.

If you’re busy managing job sites, chasing crews, and juggling deadlines, an insurance audit is probably the last thing you want to deal with. But if you carry General Liability, Workers Compensation, or any policy that’s based on payroll, sales, or subcontractor costs, audits are part of the game.

While we won’t be the ones reviewing your books, we’ll guide you through what’s typically required so you’re not caught off guard.

What Is an Insurance Audit?

When you bought your policy, you gave the insurance company your best guess for the year, such as estimated payroll or total sales.

At the end of your policy term, they compare those estimates to your actual numbers:

• If you came in under you might get a refund or credit.
• If you went over expect a bill for the difference.

Commonly audited policies include:

• General Liability – often based on sales or subcontractor costs.
• Workers Compensation – based on payroll and job type. Insurance companies group job types into categories called class codes. Each code has its own rate based on the risk of injury.
• Builders Risk – covers a building under construction. Less common for audits, but large jobs may require a final check.

What Triggers an Audit?

• Your policy is based on estimated payroll, sales, or subcontractor costs.
• You added coverage mid-year, such as a new employee or job site.
• You changed the type of work you do.
• You work in a higher-risk trade like construction, remodeling, or design-build.

Even without a formal letter, you might get a “voluntary audit.” This is when the insurance company requests updated information, often through an online form, even though they are not required to conduct a full audit at that time.

What Will They Ask For?

Here’s the short list so you’re not blindsided:

General Liability

• Total sales for the year.
• Subcontractor costs plus Certificates of Insurance (COIs). A COI is a document proving a subcontractor’s insurance coverage.
• Job descriptions and types.
• Number of jobs completed.

Workers Comp

• Payroll reports, including officer pay.
• Job type for each person, also called class codes.
• List of all employees and subcontractors.
• Owner inclusion or exclusion forms.

💡 Pro Tip: Keep digital copies of all subcontractor COIs. If you don’t have them, your insurance company might charge you as if the sub was your employee.

Real-Life “Audit Gotchas”

These are the moments contractors wish they’d known about sooner:

“I didn’t know I had to include subcontractor costs.”
No insurance means they count as your employees, and you pay for it.

“I used the wrong job category.”
Mark a desk worker as a roofer and your rate can increase quickly. These job categories are called class codes, and accuracy matters.

“I didn’t track payroll by job type.”
If you do both office work and field work but do not record them separately, the auditor may rate all payroll at the higher, more expensive rate.

“I forgot about temps and delivery drivers.”
Even if they are not on your regular payroll, they can still count toward your totals and your bill.

How to Prepare (Without Losing Your Mind)

Keep track of the important numbers all year.
Write down payroll, subcontractor payments, and total sales each month. A simple notebook or spreadsheet works fine. It’s much easier than trying to dig up 12 months of info at the last minute.

Save proof that your subs have their own insurance.
Save COIs for every subcontractor. No proof means no mercy.

Make sure each person is in the right job category.
Double-check job categories with your agent at the start and if work changes.

Speak up if you’re unsure about something.
It’s always better to ask questions early than be hit with a surprise bill later.

Bottom line: An audit is just a review of your numbers. If you keep good records and know what’s expected, it’s not scary. and you might even end up with a refund.

Bonus: New to Contractor Insurance?

If you’re just getting started or have a subcontractor who needs coverage to qualify for a job, we make it easy to book a coverage appointment and get things moving:

Let’s Make Audit Season Less Stressful

At Abbott Insurance, we’re not just here to sell you a policy. We’re here to help you avoid surprises that cost time and money. Whether you need help understanding audit triggers, adjusting estimates mid-policy, or preparing for growth, we’ll walk you through your options in plain English.