I am guessing that you are referring to a worker's compensation policy, as that type of provision is almost universally found in those policies. You can appreciate that a lot of employers low-ball the number of employees, their wages and change the job descriptions to obtain a lower premium. The insurers are allowed to see the actual figures after the fact and to make adjust- ment to the premiums based upon actual practice.
The defense? If indeed this is worker's comp, then your defense are: 1) make sure that the audit isn't too late under the terms of the policy; and 2) is to show that the premium audit is incorrect, in terms of job classifications and actual payments made. Insurance companies make mistakes too.
I hope you found this response to be of assistance.
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