Exam DISC-IA Practice Question 824
Study guide: Exam DISC-IA
A contractor's CGL shows an advance premium of $18,000 based on estimated payroll. At the end of the audit period the insurer computes the earned premium from the actual payroll as $15,500, and the contractor has paid the full $18,000. Under the premium audit condition, what happens?
- A) Nothing, because the advance premium is the premium for the policy
- B) The insurer returns $2,500 to every named insured in equal shares
- C) The insurer returns $2,500 to the first named insured
- D) The insurer applies the $2,500 as a credit against the next policy's premium, because return premiums are not allowed on audit
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