5650 Sanderson Street
Suite Q
Huntsville, AL 35805-1901

Z9999 - Test Insurance Company
111 Main Street
Any City, AL   35801


Transmittal for Audit ID: 184474


Policy Number(s)
GL 98-ZY-7654-3		Insured Name and Address
XYZ Construction Inc
123 Any St
Nashville, TN   37208		Audit Period
05/30/2004
to
05/30/2005
Date Received
10/18/2005
Date Completed

Auditor No.
9
Billing Summary
Do Not Pay Invoice to Follow
Entered DateDescriptionAmountQuantityTotal
This audit was 0 billed0.000.000.00
Total:0.00


 

Wilkinson Premium Audit Manager Powered by AuSuM Systems
Carrier
Test Insurance Company
111 Main Street
Any City, AL   35801
Agent
Alpha Ins Agcy Inc
Policy Information
GL 98-ZY-7654-3
General Liability
05/30/2004 to 05/30/2005
AuditID: 184474
Audit Method: Physical
Audit Complete Type: Regular 		Insured Name and Address
XYZ Construction Inc
123 Any St
Nashville, TN   37208 		Completed By
Keith West
Wilkinson Insurance Services
5650 Sanderson Street Suite Q
Huntsville, AL   35805
Date Completed: 12/07/2006
FA Version: 3.0.5232 PID: 26
Description of Operations ... Audit 184474 ... Entity: XYZ Construction Inc

Policy No(s): 98-ZY-7654-3; Policy Period: 05/30/2004 to 05/30/2005

Legal Entity:  CORPORATION

The insured is a corporation in Nashville, TN operating under the name of XYZ Construction Inc. The insured is a general contractor working for insurance companies performing residential restoration work. They are doing fire, water, and wind damage restoration. This type of work includes cleaning up homes after these types of disasters have occurred. Field employees could perform a variety of tasks, depending on the damage incurred, including tearing out old flooring (carpet, tile, wood, etc.) and replacing with new, tearing out damaged drywall and replacing with new, painting, etc. In this period field employees performed primarily painting and carpentry work, no interchange of labor. The painting employees were classified under the 98305 class code and all carpentry related work was placed under the 91340 class code.

Employees working in the offices of the insured have been excluded. These workers are performing various tasks such as receptionist, bookkeeping, scheduling, etc.

Several employees are excluded as outside estimators. They are performing job estimates and have travel responsibilities included within the regular scope of the job duties. They do not perform any construction related work.

The insured also used a number of insured subcontractors and uninsured subcontractors. Certificates of insurance were reviewed for all insured subs and all have been included in the 91583 class code per verification of their COI’s. Payments made to the insured subs were all covered within the COI dates. All uninsured subs were included in the appropriate class code per their duties.

Officer 1 is the President and is included in the 91580 class code. Officer 2 is the Secretary/Treasurer and is included in the 91580 class code. Both officers are active in the business overseeing all operations, visiting job sites on a regular basis to determine job progress, provide indirect supervision through the job site foremen, etc.


Exposure Summary ... Audit 184474 ... 06/01/2004 to 06/01/2005 ... Policy 98-ZY-7654-3

Policy No(s): 98-ZY-7654-3; Policy Period: 05/30/2004 to 05/30/2005

State Code Classification   Premium Basis Exposure
TN 91340 Carpentry-const.of resdntl.property not excdg.3 strs.   Payroll 85,384
TN 91580 Contractors-exec. superv. or exec. superint.   Payroll 52,000
TN 92338 Dry wall or wallboard installation   Payroll 0
TN 94569 Floor covering installation   Payroll 0
TN 98305 Painting-interior-buildings or structures   Payroll 188,096
TN 98344 Paperhanging   Payroll 0
TN 98678 Roofing - residential   Payroll 0
  Subcontractors Exposure Summary ... 06/01/2004 to 06/01/2005
State Code Classification   Premium Basis Exposure
TN 91340 Carpentry-const.of resdntl.property not excdg.3 strs.   Payroll 8,369
TN 91583 Insured subcontractors - one or two family dwellings   Total Cost 278,265
TN 98305 Painting-interior-buildings or structures   Payroll 8,486
TN 98678 Roofing - residential   Payroll 18,453


Principal’s Information ... Audit 184474 ... Entity: XYZ Construction Inc

Policy No(s): 98-ZY-7654-3; Policy Period: 05/30/2004 to 05/30/2005

Officer 1 President Included
Start/End Dates: 06/01/2004 to 06/01/2005 Min: 5,200 Max: 26,000
CORPORATION TN 91580 Contractors-exec. superv. or exec. superint. Payroll
Audit Period: 06/01/2004 to 06/01/2005 Total Amount: 94,000 Included At: 26,000
          Executive Supervisor
Officer 2 S/T Included
Start/End Dates: 06/01/2004 to 06/01/2005 Min: 5,200 Max: 26,000
CORPORATION TN 91580 Contractors-exec. superv. or exec. superint. Payroll
Audit Period: 06/01/2004 to 06/01/2005 Total Amount: 52,200 Included At: 26,000
          Executive Supervisor


Exposure Recap ... Audit 184474 ... 06/01/2004 to 06/01/2005

Policy No(s): 98-ZY-7654-3; Policy Period: 05/30/2004 to 05/30/2005

State Code Classification Premium Basis
TN 91340 Carpentry-const.of resdntl.property not excdg.3 strs.   Payroll
    Emp 13  -Carpentry   23,007
    Emp 14  -Carpentry   31,493
    Emp 15  -Carpentry   28,986
    Emp 16  -Carpentry   1,898
    Total:   85,384
TN 91580 Contractors-exec. superv. or exec. superint.   Payroll
    *Officer 1  -Executive Supervisor   26,000
    *Officer 2  -Executive Supervisor   26,000
    Total:   52,000
TN 92338 Dry wall or wallboard installation   Payroll
        0
    Total:   0
TN 94569 Floor covering installation   Payroll
        0
    Total:   0
TN 98305 Painting-interior-buildings or structures   Payroll
    Emp 1  -Painting   37,209
    Emp 10  -Painting   5,685
    Emp 11  -Painting   13,388
    Emp 12  -Painting   8,190
    Emp 2  -Painting   30,126
    Emp 3  -Painting   32,730
    Emp 4  -Painting   22,486
    Emp 5  -Painting   360
    Emp 6  -Painting   7,721
    Emp 7  -Painting   5,175
    Emp 8  -Painting   2,168
    Emp 9  -Painting   22,858
    Total:   188,096
TN 98344 Paperhanging   Payroll
        0
    Total:   0
TN 98678 Roofing - residential   Payroll
        0
    Total:   0
TN   EXCLUDED    
    Emp 17  -Receptionist   20,661
    Emp 18  -Bookkeeper   40,000
    Emp 19  -Secretary   52,497
    Emp 20  -Checks/paperwork   37,625
    Emp 21  -A/R   25,900
    Emp 22  -Payroll   31,481
    Emp 23  -Outside estimator   191,352
    Emp 24  -Outside estimator   94,000
    Emp 25  -Outside estimator   73,539
    Emp 26  -Outside estimator   10,417
    Total:   577,472
Subcontractors Exposure Recap ... Audit 184474 ... 06/01/2004 to 06/01/2005

Policy No(s): 98-ZY-7654-3; Policy Period: 05/30/2004 to 05/30/2005

State Code Classification Premium Basis
TN 91340 Carpentry-const.of resdntl.property not excdg.3 strs.   Payroll
    Sub 10   7,682
    Sub 13   90
    Sub 7   597
    Total:   8,369
TN 91583 Insured subcontractors - one or two family dwellings   Total Cost
    Sub 12   14,686
    Sub 14   101,641
    Sub 15   260
    Sub 16   9,218
    Sub 17   150
    Sub 18   750
    Sub 19   45,686
    Sub 2   1,000
    Sub 20   1,880
    Sub 3   6,655
    Sub 4   76,989
    Sub 5   7,583
    Sub 6   4,892
    Sub 8   5,645
    Sub 9   1,230
    Total:   278,265
TN 98305 Painting-interior-buildings or structures   Payroll
    Sub 11   8,486
    Total:   8,486
TN 98678 Roofing - residential   Payroll
    Sub 1   18,453
    Total:   18,453


Worksheet Stacked #1 ... Audit 184474

Policy No(s): 98-ZY-7654-3; Policy Period: 05/30/2004 to 05/30/2005

Date Gross Col 3 Col 4 Col 5 Col 6
  Payroll 91580 Contractors-exe superv. or exec. s 91580 Contractors-exe superv. or exec. s 98305 Painting-interi or structures 98305 Painting-interi or structures
  Computer report Officer 2 Officer 1 Emp 1 Emp 2
    TN TN TN TN
           
06/1-06/30: 65,746 4,350 4,667 2,545 2,555
Q3 2004: 194,480 13,050 14,000 9,415 7,711
Q4 2004: 435,367 13,050 52,000 10,490 8,170
Q1 2005: 180,819 13,050 14,000 8,561 6,719
04/1-5/31: 120,740 8,700 9,333 6,198 4,971
  997,152 52,200 94,000 37,209 30,126

Date Col 7 Col 8 Col 9 Col 10 Col 11
  98305 Painting-interi or structures 98305 Painting-interi or structures 98305 Painting-interi or structures 98305 Painting-interi or structures 98305 Painting-interi or structures
  Emp 3 Emp 4 Emp 5 Emp 6 Emp 7
  TN TN TN TN TN
06/1-06/30: 2,352 1,806 360 1,946 1,671
Q3 2004: 8,212 7,039   5,775 3,504
Q4 2004: 9,032 6,753      
Q1 2005: 7,328 6,671      
04/1-5/31: 5,806 217      
  32,730 22,486 360 7,721 5,175

Date Col 12 Col 13 Col 14 Col 15 Col 16
  98305 Painting-interi or structures 98305 Painting-interi or structures 98305 Painting-interi or structures 98305 Painting-interi or structures 98305 Painting-interi or structures
  Emp 8 Emp 9 Emp 10 Emp 11 Emp 12
  TN TN TN TN TN
06/1-06/30: 2,168 384      
Q3 2004:   4,616 1,224    
Q4 2004:   6,586 4,461 1,312  
Q1 2005:   6,240   7,244 4,221
04/1-5/31:   5,032   4,832 3,969
  2,168 22,858 5,685 13,388 8,190

Date Col 17 Col 18 Col 19 Col 20 Col 21
  91340 Carpentry-const resdntl.propert no 91340 Carpentry-const resdntl.propert no 91340 Carpentry-const resdntl.propert no 91340 Carpentry-const resdntl.propert no EXCLUDE
  Emp 13 Emp 14 Emp 15 Emp 16 Emp 17
  TN TN TN TN  
06/1-06/30: 1,913 2,538 2,314   1,598
Q3 2004: 6,044 8,461 7,567   5,075
Q4 2004: 5,919 7,010 7,702   5,755
Q1 2005: 4,981 7,289 6,510   4,778
04/1-5/31: 4,150 6,195 4,893 1,898 3,455
  23,007 31,493 28,986 1,898 20,661

Date Col 22 Col 23 Col 24 Col 25 Col 26
  EXCLUDE EXCLUDE EXCLUDE EXCLUDE EXCLUDE
  Emp 18 Emp 19 Emp 20 Emp 21 Emp 22
06/1-06/30: 3,167 4,000 3,750 1,994 2,500
Q3 2004: 9,500 12,999 11,250 6,288 7,500
Q4 2004: 11,500 14,499 13,250 7,006 8,981
Q1 2005: 9,500 11,999 9,375 5,853 7,500
04/1-5/31: 6,333 9,000   4,759 5,000
  40,000 52,497 37,625 25,900 31,481

Date Col 27 Col 28 Col 29 Col 30 Col 31
  EXCLUDE EXCLUDE EXCLUDE EXCLUDE 92338 Dry wall or wallboard installation
  Emp 23 Emp 24 Emp 25 Emp 26  
  TN TN TN TN TN
06/1-06/30: 4,167 4,667 4,167 4,167  
Q3 2004: 12,500 14,000 12,500 6,250  
Q4 2004: 153,852 52,000 36,039    
Q1 2005: 12,500 14,000 12,500    
04/1-5/31: 8,333 9,333 8,333    
  191,352 94,000 73,539 10,417  

Date Col 32 Col 33 Col 34 Col 35 Col 36
  94569 Floor covering installation 98344 Paperhanging 98678 Roofing - residential    
           
  TN TN TN    

Subcontractors ... Audit 184474 ... Entity: XYZ Construction Inc

Policy No(s): 98-ZY-7654-3; Policy Period: 05/30/2004 to 05/30/2005

Sub 1 Roofing    
  98678 Roofing - residential Payroll Liability Lim:  0
  Contract period: 06/01/2004 to 06/01/2005 Cost:  36,906 Materials:  18,453 Exposure:  18,453


Cost and Contract Period Detail  
06/01/2004 0         
06/01/2005 0         


Sub 10 Carpentry    
  91340 Carpentry-const.of resdntl.property Payroll Liability Lim:  0
  Contract period: 06/01/2004 to 06/01/2005 Cost:  15,314 Materials:  7,632 Exposure:  7,682


Cost and Contract Period Detail  
06/01/2004 0         
06/01/2005 0         


Sub 11 Painting    
  98305 Painting-interior-buildings or stru Payroll Liability Lim:  0
  Contract period: 06/01/2004 to 06/01/2005 Cost:  16,971 Materials:  8,485 Exposure:  8,486


Cost and Contract Period Detail  
06/01/2004 0         
06/01/2005 0         


Sub 12 Indiana Insurance    
  CB1234 Policy period: 07/25/2004 to 07/25/2005 Audit State: TN  
  91583 Insured subcontractors - one or two Total Cost Liability Lim:  2,000,000
    Cost:  14,686 Materials:  0 Exposure:  14,686
Sub 13 Carpentry    
  91340 Carpentry-const.of resdntl.property Payroll Liability Lim:  0
  Contract period: 06/01/2004 to 06/01/2005 Cost:  160 Materials:  70 Exposure:  90


Cost and Contract Period Detail  
06/01/2004 0         
06/01/2005 0         


Sub 14 Harleysville Mutual Insurance    
  B234567 Policy period: 12/08/2004 to 12/08/2005 Audit State: TN  
  91583 Insured subcontractors - one or two Total Cost Liability Lim:  2,000,000
    Cost:  101,641 Materials:  0 Exposure:  101,641
Sub 15 Harleysville Ins.    
  MPA12345 Policy period: 04/07/2004 to 04/07/2005 Audit State: TN  
  91583 Insured subcontractors - one or two Total Cost Liability Lim:  2,000,000
    Cost:  260 Materials:  0 Exposure:  260
Sub 16 State Auto Insurance    
  PBP4567890 Policy period: 11/01/2044 to 11/01/2005 Audit State: TN  
  91583 Insured subcontractors - one or two Total Cost Liability Lim:  2,000,000
    Cost:  9,218 Materials:  0 Exposure:  9,218
Sub 17 State Auto    
  PBP12345678 Policy period: 07/01/2004 to 07/01/2005 Audit State: TN  
  91583 Insured subcontractors - one or two Total Cost Liability Lim:  2,000,000
    Cost:  150 Materials:  0 Exposure:  150
Sub 18 State Auto Insurance    
  SOP6789 Policy period: 08/11/2004 to 08/11/2005 Audit State: TN  
  91583 Insured subcontractors - one or two Total Cost Liability Lim:  2,000,000
    Cost:  750 Materials:  0 Exposure:  750
Sub 19 Union Insurance    
  CPA345678 Policy period: 10/01/2004 to 10/01/2005 Audit State: TN  
  91583 Insured subcontractors - one or two Total Cost Liability Lim:  2,000,000
    Cost:  45,686 Materials:  0 Exposure:  45,686
Sub 2 Employers Mutual Insurance    
  3D123456 Policy period: 06/01/2004 to 06/01/2005 Audit State: TN  
  91583 Insured subcontractors - one or two Total Cost Liability Lim:  2,000,000
    Cost:  1,000 Materials:  0 Exposure:  1,000
Sub 20 Grange Mutual    
  GLA23456 Policy period: 08/01/2004 to 08/01/2005 Audit State: TN  
  91583 Insured subcontractors - one or two Total Cost Liability Lim:  2,000,000
    Cost:  1,880 Materials:  0 Exposure:  1,880
Sub 3 Pennsylvania National Ins. Co.    
  CL9456789 Policy period: 08/29/2004 to 08/29/2005 Audit State: TN  
  91583 Insured subcontractors - one or two Total Cost Liability Lim:  2,000,000
    Cost:  6,655 Materials:  0 Exposure:  6,655
Sub 4 Union Standard Insurance    
  CPA12345678 Policy period: 06/21/2004 to 06/21/2005 Audit State: TN  
  91583 Insured subcontractors - one or two Total Cost Liability Lim:  2,000,000
    Cost:  76,989 Materials:  0 Exposure:  76,989
Sub 5 Zurich    
  1234567 Policy period: 01/05/2005 to 01/05/2006 Audit State: TN  
  91583 Insured subcontractors - one or two Total Cost Liability Lim:  2,000,000
    Cost:  7,583 Materials:  0 Exposure:  7,583
Sub 6 Penn National Insurance    
  AC9-123456 Policy period: 04/28/2004 to 04/28/2005 Audit State: TN  
  91583 Insured subcontractors - one or two Total Cost Liability Lim:  2,000,000
    Cost:  4,892 Materials:  0 Exposure:  4,892
Sub 7 Carpentry    
  91340 Carpentry-const.of resdntl.property Payroll Liability Lim:  0
  Contract period: 06/01/2004 to 06/01/2005 Cost:  1,194 Materials:  597 Exposure:  597


Cost and Contract Period Detail  
06/01/2004 0         
06/01/2005 0         


Sub 8 Hartford Fire Insurance Company    
  20SBATC1234 Policy period: 03/13/2004 to 03/13/2005 Audit State: TN  
  91583 Insured subcontractors - one or two Total Cost Liability Lim:  2,000,000
    Cost:  5,645 Materials:  0 Exposure:  5,645
Sub 9 Amerisure Companies    
  GL123456 Policy period: 01/01/2005 to 01/01/2006 Audit State: TN  
  91583 Insured subcontractors - one or two Total Cost Liability Lim:  2,000,000
    Cost:  1,230 Materials:  0 Exposure:  1,230


General Liability Verification ... Audit 184474 ... 06/01/2004 to 06/01/2005

Policy No(s): 98-ZY-7654-3; Policy Period: 05/30/2004 to 05/30/2005

State Code Classification                            Exposure
TN 91340 Carpentry-const.of resdntl.property not excdg.3 strs.   Payroll 85,384
TN 91580 Contractors-exec. superv. or exec. superint.   Payroll 52,000
    Name (* Principal) Adjustment Description Adjustment
    *Officer 1 Over Inclusion Maximum 68,000
    *Officer 2 Over Inclusion Maximum 26,200
        ---------------
      Adjustments Total: 94,200
TN 92338 Dry wall or wallboard installation   Payroll 0
TN 94569 Floor covering installation   Payroll 0
TN 98305 Painting-interior-buildings or structures   Payroll 188,096
TN 98344 Paperhanging   Payroll 0
TN 98678 Roofing - residential   Payroll 0
TN   EXCLUDED     577,472
        ---------------
      Audit Total: 997,152


Worksheet Gross Total:           997,152      Verification Source Total:           997,152


End of Report -- Audit No: 184474; Policy No(s): 98-ZY-7654-3; Policy Period: 05/30/2004 to 05/30/2005


General Information ... Audit 184474 ... Policy 98-ZY-7654-3

Policy No(s): 98-ZY-7654-3; Policy Period: 05/30/2004 to 05/30/2005

Insured:
XYZ Construction Inc
123 Any Street Nashville, TN 12345
Entity: XYZ Construction Inc
Phone: 615-123-4567
Records obtained from:
Jane Doe
123 Any Street Nashville, TN 12345

----------------Verification Source Record-----------------

Entity: XYZ Construction Inc.
Verification Source Record: Federal 941 & State U/C
Employer’s Federal ID No.: 12-3456789


1st Quarter 2005: 180,819  
2nd Quarter 2005: 0  
3rd Quarter 2004: 194,480  
4th Quarter 2004: 435,367  
Subtotal: 810,666  
Adjustment Dates Description Adjustment Amount
04/01/2005 to 05/31/2005   120,740
06/01/2004 to 06/30/2004   65,746
Adjusted Subtotal:   997,152
Grand Total: 997,152  


General Liability Checklist
Policy number and policy period match the request? YES General ledger or checkbook reviewed? YES
15 day rule observed for the audit period? YES Invoices reviewed for materials credit for uninsured subs? YES
If employees are lumped, did you provide # of employees? N/A G/L, did you include one principal? YES
Was the total subcontractor cost considered? YES Did the subcontractor(s) have adequate liability limits? YES
General Information Checklist
Are the records computerized? YES What is the condition of the records? GOOD
Were payroll journal records examined? YES Were general ledger records examined? YES
Was the check book examined? NO Were income tax return records examined? NO
Were cash disbursement records examined? NO Were S/S Returns examined? YES
Were U/C Returns examined? YES Were cash receipt records examined? YES
Were Certificates of Insurance examined? YES Were 1099 records examined? NO
What other records were examined? NONE All locations/addresses shown verified/discussed on audit? YES


Notes To Audit Department ... Audit 184474 ... Policy 98-ZY-7654-3

Policy No(s): 98-ZY-7654-3; Policy Period: 05/30/2004 to 05/30/2005

Test Insurance Company Any City, AL
XYZ Construction Inc Nashville, TN
XYZ Construction Inc  
Auditor: Keith West Wilkinson Insurance Services, Inc. (256) 880-2900  


Percent difference between actual and estimated exposures (negative if est. > act.):
State Code Classification Prem. Basis Extra ID Percent Difference
TN 91340 Carpentry-const.of resdntl.property not excdg.3 strs. Payroll   (68)%
TN 92338 Dry wall or wallboard installation Payroll   (100)%
TN 94569 Floor covering installation Payroll   (100)%
TN 98305 Painting-interior-buildings or structures Payroll   21%
TN 98344 Paperhanging Payroll   (100)%
TN 98678 Roofing - residential Payroll   (100)%


Exit Interview conducted on: 08/31/2005 at 11:00:00 AM
Interviewee: Jane Doe Title: Bookkeeper


          Notes To Audit Department-----------------------------------

          Gross Sales for the period 06/01/2004 to 05/30/2005 is $4,330,582.

          

          Exposures vary based on available jobs for the insured versus use of insured and uninsured subs.

          In this insured’s line of work exposures will vary from year to year based on this availability of

          work and what is needed to be completed in each job.

          

          The insured provided payroll reports broken down by employee and class code which were used for the

          audit exposure. The only problem was that they had overtime, vacation, and holiday pay excluded

          from the payroll as one total for each employee. I informed the insured that vacation and holiday

          could not be deducted but premium O/T could. I requested that she forward me the O/T by itself for

          each employee so that this deduction could be made. This request was made on Thursday, 6/30. As

          of 7/8 I have not received this information. I am submitting the audit with no O/T deductions at

          this time.

          

          Extra time spent completing this audit due to the number of employees and subs. Payroll was

          verified and detailed off the even quarters and all insured subs had to have their COI’s verified.

          This took extra time based on the large number of employees and subs.

          

          Proper COI’s are maintained by the insured for their insured subs. Current COI’s are also backed

          up by COI’s from the prior years.

          

          A maximum of 50% was allowed for deduction of materials. Invoices were reviewed.