During a premium audit, which data is commonly examined to determine exposure?

• A. Driving records
• B. Medical history
• C. Credit score
• D. Payroll records and sales data

Answer: (D)

During a premium audit, the insurer needs to translate the insured’s business activity into a measurable exposure that the premium is based on. For most commercial policies, that exposure is tied to payroll (used for workers’ compensation) and gross receipts or sales (used for general liability and other lines). By reviewing payroll records and sales data for the policy period, the auditor determines the actual exposure and adjusts the premium accordingly to reflect the true level of risk.

Driving records, medical history, and credit score don’t measure exposure the way payroll or receipts do. Driving records are more about auto risk, medical history relates to individual underwriting, and credit scores may influence some rating decisions but not the exposure base used to calculate premiums during an audit.