What is the most common reason premium audits are conducted?

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What is the most common reason premium audits are conducted?

A. The amount of actual losses are not known at the start of the policy period.
B. Loss control activities during the policy period may reduce the risk of loss.
C. Claim examiners have discovered unacceptable operations during the policy period.
D. The amount of the loss exposure is unknown at the start of the policy period.

Answer: D. Premium audits are conducted because the amount of the loss exposure is unknown at the start of the policy period, and the premium must be adjusted to reflect the actual loss exposure during the period.

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