Understanding Business Audits - Instructions for Customers
Running a business entails numerous responsibilities, one of which is ensuring that your operations, records, and insurance coverage comply with legal, tax, and industry requirements.
Business audits are a standard part of this process. While the word "audit" may sound intimidating, with proper preparation — and the right support — it can be straightforward and stress-free. At Ella Business Center, we conduct two of the most common audits small and mid-sized businesses are required to complete: the NYSIF Workers' Compensation Audit and the General Liability (GL) Audit. Whether you're a new business or an established operation, we ensure the process is handled with accuracy, efficiency, and professionalism.
NYSIF Audit – Workers' Compensation Review
If your business holds Workers' Compensation insurance through the New York State Insurance Fund (NYSIF), you will likely undergo a Workers' Compensation audit. This audit examines employee-related risks explicitly to ensure that you have adequate coverage for workplace injuries. Its purpose is to verify that the premium you paid accurately reflects your actual business operations. During the audit, NYSIF reviews information such as your total payroll, the specific job classification of your employees, and whether you used subcontractors. Your Workers' Compensation premium depends on the risks of the work your employees do. If your payroll or job classifications change during the year, your premium might need to be adjusted. The audit ensures you are paying the correct amount, which helps protect your business and your employees.
General Liability (GL) Audit
Many businesses carry both General Liability insurance and Workers' Compensation insurance. This insurance protects against claims for property damage, bodily injury, and other risks from third parties. At the end of your policy period, your insurance company may conduct a General Liability audit. This audit looks at your overall business operations and helps protect you from risks involving customers, clients, or third parties. It also checks that your premium accurately reflects the actual size and risk of your business. It typically examines total sales revenue, total payroll, and the size of your business location. If your company has grown or changed during the year, the audit helps adjust your premium to fit your current operations.
How to Prepare
The easiest way to handle these audits is to stay organized throughout the year. We recommend keeping the following records up to date-and easily accessible:
- Payroll reports
- Revenue and sales summaries
- Subcontractor information
- Employee job classifications
- Square footage details for your business location
- Certificates of insurance for subcontractors, if applicable
With the proper preparation and guidance, these routine reviews can be handled smoothly and without unnecessary stress. If you need help gathering your documents or you have questions regarding the audit process, don't hesitate to contact us at (718) 586 4222.