How do you prepare for a malpractice insurance audit?

Malpractice insurance audits are conducted by carriers to verify that the information you provided on your application accurately reflects your firm's actual operations. Being prepared can make the process smooth and avoid unexpected premium adjustments.

Revenue verification is the primary focus of most audits. Carriers want to confirm that your actual gross revenue matches what you reported on your application or renewal. Have your financial statements, tax returns, and billing records organized and accessible. If your actual revenue significantly exceeds what you reported, expect a retroactive premium increase. If it falls below, you may be entitled to a return premium.

Attorney count must match your reported figures. Provide a current roster of all attorneys — partners, associates, of-counsel, contract attorneys — with bar numbers, start dates, and practice area assignments. If you added attorneys during the policy period without notifying the carrier, the audit will catch this and generate additional premium.

Practice area mix verification ensures you are properly rated. If you reported your practice as primarily corporate transactional work but the audit reveals significant personal injury revenue, your premium may be adjusted retroactively to reflect the higher-risk practice area.

Risk management documentation can work in your favor. If your policy provides risk management credits, have documentation ready: CLE completion certificates, written intake and conflict check procedures, calendaring system documentation, engagement letter templates, and trust account reconciliation records.

Common audit triggers include revenue growth exceeding 20% year over year, adding three or more attorneys during the policy period, expanding into new practice areas, or filing a claim. Not all policies are audited every year — carriers typically audit a percentage of their book annually and prioritize larger or higher-risk accounts.

To minimize audit surprises, report changes to your carrier as they occur rather than waiting for renewal. Mid-term endorsements to add attorneys or report practice area changes are routine and keep your coverage accurate throughout the policy period.