Is Anyone Auditing Your Insurance Audits? Phillip Lane, CLCS, Vice President, Insurance Office of America The word audit is defined by Merriam-Webster as “a formal examination of an organization’s or individual’s accounts or financial situation” and it is derived from the Latin word “audire” which means “to hear.” As a commercial property and casualty insurance agent who has reviewed hundreds of insurance audits, I find the Latin root word to be very ironic. You see, the most common root of the mistakes we find in our detailed review of General Liability and Workers’ Compensation insurance audits is in fact, miscommunication. Miscommunication between an insured and an auditor during the insurance audit process should not surprise anyone, but what might surprise you is that most audits contain mistakes and are never reviewed again once completed. It’s my belief that auditors and insureds alike strive to make sure their audits are done correctly, but I also believe that it is unrealistic to expect the insured to be able to determine, on their own, if the insurance audit has been done correctly.
FLORIDA ROOFING | March 2021
Unfortunately, most insurance brokers stay out of the insurance audit process and feel it is the responsibility of the insurance company and the insured. Accurate information and communication are two key components to completing an insurance audit accurately. It’s very important for the insured to enlist the help of their insurance broker when attempting to determine the accuracy of their insurance audits. The insurance broker who placed the insurance coverage can work directly with the insured and the insurance auditor to help ensure that the audit is done