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Worthley Industries (Worthley) is a manufacturer of steel pipes. Because of a sharp increase in the cost of steel, Worthley's annual sales are significantly higher

Worthley Industries (Worthley) is a manufacturer of steel pipes. Because of a sharp increase in the cost of steel, Worthley's annual sales are significantly higher than originally forecasted. As a result, Worthley's audited general liability premium is also significantly higher. Mr. Worthley argues that the premium should not be any higher because he has sold the same number of pipes as originally estimated. The increase in sales is based strictly on the increased price of the pipes, due to the increased cost of steel. Which one of the following would be the best thing for the underwriter to do to avoid this argument in the future? A. Renew Worthley's general liability policy on a composite rate based on the number of pipes sold. B. Monitor the price of steel and adjust the rate as the price of steel fluctuates C. Explain to the insured regulations and that they need to do a better job of estimating sales up front. D. Perform quarterly audits to adjust for fluctuations in the price of steel.

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