In an exclusive interview with Practicomm, top insurance agency professional, Bob Marmo, provides valuable answers to controversial insurance issues.
Question #1: How does my loss ratio affect business insurance premiums?
Marmo: The loss ratio for business insurance reflects the premium paid to the insurance company and the amount the insurance company paid out in claims. A good loss ratio makes your policy (or policies) more attractive to your current or new insurance company; therefore, they are apt to apply discounts to your premiums.
Question #2: Why does it take longer to a get a business insurance quote than an auto insurance quote?
Marmo: Auto insurance quotes are always quicker to quote since the information required is much less. Once you secure the driver’s and vehicle information, together with the motor vehicle records of all the drivers and input that information into our computers, it will issue a premium quotation, based on the information and coverage requested, from several of the insurance companies we represent. Business Insurance has many more rating factors to take into consideration. With Business Insurance, we need to secure the past three hard copy loss runs, meet with the client to discuss their complete business operation, discuss the different type of coverages that fit their specific business and discuss their past experience with their current insurance company and agent, regardless if it’s been good or bad. With many small business owners, their business is their pension plan and it is most important that we help them protect it properly, in case of a major claim.
Question #3: Why are Workers Compensation rates so expensive?
Marmo: In New Jersey, for example, Workers Compensation insurance is governed by the State of New Jersey and NOT the insurance companies. The rates used for all the various classifications are established by the State and all the insurance companies must use those rates. In addition to the rates, the State will also publish the experience modification factor for each business in the State if their annual premium exceeds $4,000. This factor works on a debt and/or credit modification, depending on premiums paid in and claims that are paid out. Also, depending on the experience modification factor, some insurance companies may apply an upfront credit to the policy and may even add a back-end dividend.
Question #4: Is it necessary for my business to have EPLI (Employment Practices Liability Insurance)?
Marmo: In today’s society, all businesses should be protected with an EPLI (Employment Practices Liability Insurance) insurance policy. New Jersey, in particular, is a very litigious state and claims for sexual harassment, wrongful termination and failure to promote or hire, are being filed in an unprecedented amount each and every day. One only has to look at the Kavanaugh hearings to see how vulnerable your business is in today’s society. Bear in mind that the average cost to defend a sexual harassment claim in the State of New Jersey is running about $110,000 and a wrongful termination claim runs about $95,000.
Business insurance premiums overall are not going down—if you continue being complicit and pay your renewal premiums each and every year, without getting a second premium quotation from another agent, you are playing into the insurance companies’ hands. That is, if you do nothing about checking your coverage and premiums with another company and/or agent, they will increase each and every year. One of the main advantages with working with our company is the fact that ninety (90) days before your account is up for renewal, we price it with at least five (5) of the 22 insurance companies we represent to be sure you are receiving the proper coverage at a very competitive price.
About A.C. Marmo & Sons
Centrally located in Fairfield, New Jersey, A.C. Marmo & Sons has been servicing the insurance needs of individuals, families and businesses, since 1929. Standing behind our mission statement: “Work with someone who is accessible and has the knowledge and experience to understand your needs” has established our agency as a main source for NJ Insurance. Customer satisfaction is our priority each and every day for over 5,000 clients in and beyond the tri-state area.
For more information call 973-340-9100 or