Premium audit common terms 

You may encounter the following terms while providing information to us for your premium audit. 

  • Admissions

    Total number of persons, other than working employees, admitted to an event whether by paid admissions, tickets, complimentary tickets, or passes.

  • Cases

    Total number of cases sold. A case of beverages is the equivalent of 12 bottles of 750ml capacity. A case of eggs is the number of cases processed.

  • Certificate of insurance

    Evidence that your subcontractor had insurance coverage in place for the period that the subcontractor performed work for you.

  • Description of operations

    Briefly describe your business operations. Include final product(s), process(es), types of customers, means of delivery, installation, etc.

  • Duties/job description

    Briefly describe each employee’s daily duties (e.g., payroll clerk, carpenter, shop). To be considered clerical, an employee MUST be performing general office work at a workstation that is physically separated from the following: work or service areas, areas where inventory is located, areas where products are displayed for sale, or areas where customers bring products for payment.

  • Employees

    List each employee on your payroll and for whom you withhold taxes. Show casual, day labor, leased employees, and temporary labor separately in another question on the form.

  • Federal 941

    Employer quarterly federal tax report that most companies file with the federal government showing gross payroll paid to employees. If you do not file 941s, you may use your Form 1040 Schedule C Profit or Loss From Business (pages 1 and 2), a profit and loss statement for the audit period, or another form of income tax return (Form 1120, Form 1120S, or Form 1065) or other similar state quarterly tax document that shows wages paid.

  • Full time

    Twenty hours or more per week; part time is fewer than 20 hours per week.

  • Gallons

    Total number of gallons sold. For propane, if the number of gallons is unknown, estimate the number of gallons by dividing the total sales by the average price per gallon.

  • Gross overtime

    Amount paid for hours worked for which there is an increase in the rate of pay. This amount should already be included in the gross payroll. If overtime is paid at any rate other than time and one-half, please note it on the form.

  • Gross payroll

    Amount paid to employees before any deductions such as employee savings, retirement, or cafeteria plans. Gross payroll includes wages or salaries; commissions; bonuses; overtime; and pay for holidays, vacations, or periods of sickness. It also includes the value of housing provided to employees. You may exclude the following items from gross payroll: gross overtime portion of wages (not applicable in Delaware, Nevada, Pennsylvania, and Utah), tips, and dismissal or severance earnings. The following state-specific exclusions also apply:

    • California: amounts withheld for section 125 cafeteria plans by the employees
    • Kansas: earnings for vacation, holiday, and sick pay
    • Oregon: vacation pay and unanticipated bonuses
    • South Dakota: earnings for vacation, holiday, and sick pay
    • Tennessee: unanticipated bonuses
  • Ownership

    List each owner, partner, officer, or member as shown in the operating agreement, corporate charter, or bylaws. Note if any are inactive. Provide duties and gross payroll for the policy period shown. We will make the appropriate adjustment in accordance with state payroll limitations.

  • Rounds

    Number of persons playing. A round is either public or private and nine holes or 18 holes as indicated by the class code on the form.

  • Sales

    Amount charged by you, your concessionaires, or by others trading under your name for all goods or products sold or distributed, operations performed, and rentals. This includes foreign sales. Do not include sales taxes or excise taxes that are collected and submitted to a governmental division, credits for repossessed merchandise and products returned, allowances for damaged or spoiled goods, finance charges for items sold on installments, or freight charges if freight is charged as a separate item on your customers’ invoices.

    • Restaurants: gross sales should reflect all food and beverages, including alcoholic
    • Property management fees: include the amount received from the property owner for services Do not include rental fees collected on behalf of the property owner.
  • Stop gap

    Sum of the total gross payroll for all employees (including officers) as disclosed on the filed tax forms that most closely align with the policy term being audited.

  • Student

    Average daily attendance for day sessions only, not including summer sessions.

  • Subcontractor cost

    Total cost of all labor, materials, and equipment that are furnished, used, or delivered in order to execute your work.

  • Weeks employed

    Number of weeks each employee was employed during the policy period, including vacation and sick time. A partial week is considered a full week. Use the hire and termination dates for those employees who were not on the payroll during the entire policy period.

This website is intended to be informational. Descriptions are provided only as a summary outline of the products and services available and are not intended to be comprehensive and do not constitute an offer to sell or a solicitation. The products and services described may not be available in all states or jurisdictions. See your policy, service contract, or program documentation for actual terms, conditions, and exclusions. Any inquiries regarding the subject matter set forth herein should be directed through licensed insurance professionals.

Coverage and insurance are provided and underwritten by Liberty Mutual Insurance Company or its affiliates or subsidiaries. When we offer insurance products, we will state clearly which insurer will underwrite the policy. Some policies may be placed with a surplus lines insurer. Surplus lines insurers generally do not participate in state guaranty funds and coverage may only be obtained through duly licensed surplus lines brokers.