A successful and positive experience for an Auto Service BOP audit comes with knowing what to expect and having the correct information available. To assist you, we have provided this helpful information for your agency to review with the insured.
The premium basis for Auto Service BOP is developed by rating each employee by one of three options: number of days worked, payroll, actual hours worked. The rating of each employee includes vacations, sick time and other leave of absence. Full time employees are included at 1.0. Part time employees are included at a percentage of one full time employee (1.0) based on one of the following options:
1. NUMBER OF DAYS WORKED
Formula: Number of days worked during the audit period divided by 260 (maximum chargeable working days)
Determine the number of days an employee worked for the audit period: 3 days a week for 20 weeks equals 60 days, etc
Full Time Employee: 5 days per week at 52 weeks equals 260 days. 260 days worked/260 = 1.0
Part Time Employee: 90 days worked/260 = .35
2. PAYROLL
Formula: Total gross payroll for audit period less any premium overtime divided by average hourly pay divided by 2,080 (maximum chargeable working hours)
Full Time Employee: $26,060(less OT $3,300/3)/12.00 = 2080 hours worked for audit period.
2080/2080=1.0
Part Time Employee: $18,450/10.00 = 1845 hours worked for audit period. 1845/2080=.89
3. ACTUAL HOURS WORKED
Formula: Actual Hours worked divided by 2,080 (maximum chargeable working hours)
Full Time Employee: 2,100 hours worked for audit period. 2100/2080 = 1.0
Part Time Employee: 1,428 hours worked for audit period. 1428/2080 = .69
Officers/Owners
Executive officers, proprietors, partners, and managers are included as full time (1.0) if they are active, regardless of the time worked and their job duties.
Clerical Workers
Exclude clerical employees unless they operate a vehicle as part of their job responsibilities. Clerical employees work stations must be physically separated from the shop/service area and not going in the shop.
