Why Business Owners Around Plano Face Insurance Audits
If you own a business in Plano, McKinney, Allen, Celina, Prosper, or Richardson, you already know how important insurance is to protecting your operation. When that audit notice arrives, it can be stressful, especially if you’re unsure what to expect.
The good news is that a commercial insurance audit is not a penalty. It’s a standard review that helps make sure your premium reflects your actual business activity. When handled correctly, an audit can even reduce your costs.
At The Sterling Insurance Group, we help businesses across the Dallas–Fort Worth suburbs navigate audits with confidence. These seven practical tips will help you prepare, avoid common mistakes, and move through the process smoothly.
What Is a Commercial Insurance Audit?
A commercial insurance audit is a review of your company’s payroll and financial records at the end of your policy term. The goal is to compare your original estimates to your actual numbers. Based on those results, your insurer adjusts your premium up or down.
Audits typically apply to:
- Workers’ Compensation
- General Liability
- Sometimes, Commercial Auto
Carriers may complete audits through the mail, online, by phone, or in person for larger companies.
1. Know What the Auditor Will Review
Most audits focus on payroll for workers’ compensation and gross sales or revenue for general liability. Before the audit begins, confirm:
- Which classification codes apply to your employees
- Whether subcontractors should be included
- If owners’ payroll counts toward your premium
Your Sterling Insurance Group agent can help you review these details and avoid any surprises.
2. Keep Records Organized All Year
Many business owners wait until they receive the audit notice to start gathering paperwork. Staying organized all year can save time and stress.
Keep these documents in one place:
- Quarterly 941 tax forms
- W-2s and 1099s
- Employee job descriptions
- Certificates of Insurance (COIs) for subcontractors
- Gross revenue reports
If you work in construction, HVAC, or other trades, keep detailed records of the work performed. Auditors need to understand what kind of labor was done, not just how much was paid.
3. Verify That Subcontractors Carry Insurance
If you use subcontractors, the auditor will request proof that they carry their own insurance. Without it, you could be charged as if they were employees.
Here’s what to do:
- Collect a COI from each subcontractor
- Confirm that it lists both general liability and workers’ compensation coverage
- Keep all certificates for at least five years
We’ve seen local contractors in roofing, landscaping, and remodeling overpay thousands simply because they didn’t retain subcontractor COIs.
4. Double-Check Your Classification Codes
Class codes are the four-digit identifiers that describe what your employees do. If a code is incorrect, your premium could be too.
For example, clerical staff have much lower rates than roofers, and a retail shop isn’t classified the same way as a manufacturer.
If your business has changed, such as adding new roles or services, let your Sterling agent know. We can update your policy to keep it accurate before the next audit.
5. Review Your Audit Results Carefully
Before paying your audit bill, take a moment to review the report. Mistakes can happen.
Look for:
- Incorrect class codes
- Subcontractors listed who had valid COIs
- Payroll or revenue figures that don’t match your own records
If you find errors, contact our team. We’ll help you gather documentation, file an appeal, and communicate directly with the carrier to resolve discrepancies.
6. Fine-Tune Your Estimates for Next Year
When renewing your policy, you’ll need to estimate payroll and revenue for the next term. Estimating too low can lead to an additional premium later, while estimating too high means you’ll overpay all year.
Improve accuracy by:
- Reviewing last year’s totals
- Factoring in new hires or contracts
- Tracking figures monthly
Plano and the surrounding communities are growing quickly, especially in construction, logistics, and technology. If your business expands midyear, contact us so we can adjust your policy rather than waiting for audit time.
7. Work With a Local Agent Who Knows North Texas
Commercial insurance audits can be confusing, but you don’t have to handle them alone.
The Sterling Insurance Group has helped hundreds of Texas business owners prepare for and review their audits. We:
- Review audit notices
- Explain carrier requests
- Help organize documentation
- Identify and correct errors
Because we work closely with Texas carriers and underwriters, our clients often see faster resolutions and fewer billing surprises.
Bonus Tip: Don’t Skip the Audit
Skipping an audit can cause serious issues, including:
- Policy cancellation
- Estimated audits that are higher than actual figures
- Losing eligibility for renewal
It’s always better to prepare early and stay proactive. With a local team by your side, you can complete your audit confidently and protect your business from unnecessary costs.
Ready to Get Expert Help With Your Next Audit?
You don’t have to face your audit alone.
The Sterling Insurance Group makes the process clear, efficient, and stress-free for business owners across Plano and the greater DFW area.
📍 Address: 3415 Custer Rd #104, Plano, Texas 75023
📞 Phone: (972) 964-4825
🌐 Website:www.sterlinginsnow.com
✉️ Email: info@sterlinginsnow.com