Risk & Business

During the last 5 years or so, business owners have been getting hit with what seemed to be higher experience mods. The experience mod is the work comp calculation that is suppose to reflect the loss history of the company. The problem arises when the mod goes over 1.0. When this happens businesses have trouble with industrial and commercial vendors that require mods to be under 1.0 and they are penalized on the premium they pay. When the Delaware Comp Bureau reduced rates in 2008-2011 they also reduced the expected loss rates that are in the mod calculation. Some businesses went over 1.0 even though they had no claims, just because the reduced rates affected the math calculation.  During this time,  Delaware business owners work comp premiums went down. Unfortunately, now they are dealing with mods that are over 1.0. It goes to show that when it comes to business insurance you don't get something for nothing. Work comp rates were set to low to cover claims. This affected the exper

Delaware Captive division just announced the growth of  Delaware Captive  insurance companies to the tune of 800 percent.  With over 300 licensed captives, Delaware is now one of the leading domiciles in the country. Hats off for Commissioner Weldin and her staff.

I just saw a Delaware Comp Bureau circular where they are asking the state insurance department to approve a 43 percent rate increase next year. The circular states that this increase is needed because of the hyper reduction of rates that has occurred over the last four years. We saw this coming. I even did a few blog post regarding this. The reduction of work comp rates the last few years was unsustainable. Losses are increasing as more and more employees are going back to work, and frankly there is not enough premium to support a profitable business model for insurance companies. If the rate increase is not granted, many insurance companies will find themselves on the losing side of profit. This will add instability to the Delaware work comp insurance marketplace. On the other side of this are business owners who are still having a tough time from the recession and now will have to deal with work comp increases they will hardy be able to afford. This size of increase could put some b

After 25 years in the business insurance "business", I would say the current marketplace in Delaware is tumultuous. Some companies are raising rates while a few are decreasing rates. Work Comp rates are going up but not as bad as experience mods which are affecting every business in Delaware. Property insurance rates down near the beach are staying consistant but wind deductibles are increasing. Long haul trucking is practically taboo in the standard market as most of these businesses have to go to the specialty markets for coverage. A few major players have pulled out of the school bus coverage market which has created a stir amoung school districts. And finally, large businesses who pay lots of premiums are stepping into the captive arena and starting their own insurance companies. Whew ! there are lots of things going on in business insurance in Delaware. Stay tuned. Until next time be careful out there and Know your risks. K Blog by G. Kevin Nemith, President of CNC Insu

Here is the situation, the business insurance broker/agent just realized they messed up. Unfortunately the error caused an uncovered claim against one of their clients. Now what? The first thing an agent is taught to do is call their errors and omissions insurance carrier and say nothing to the client. But is this the right strategy? Many legal scholars and risk managers are starting to suggest different. How about an apology. Yes the simple and effective apology. Now does this dictate liability? Does the apology make the business insurance agent/broker fully responsible? Many courts are now saying not neccessarily. The simple act of saying to someone you have harmed that your sorry does not mean that your at fault. It simply means that you are being human and are genuinely empathetic to the plight of others. Interestingly it is now showing that there are less law suits following an apology. Caution here, always contact your errors and omissions insurance carrier before any communicati

The insurance industry is adding jobs again. This is a good sign that the insurance market place is getting back on their feet. But what kind of jobs ?  Most of the jobs are processing and in claims. Sales jobs are still in demand but there are not as many people who want those jobs. In the business insurance world the trend of more company jobs and less sales jobs is a trend that the Internet may be driving.  Business insurance agents seem to be the ones that will have a hard time filling sales jobs while the insurance companies will be flush with applicants. Time will tell if sales opportunities that are opening will be filled. Until next time be careful out there and know your risks. Blog by Kevin Nemith  business insurance and small business insurance specialists serving DE, MD, PA, NJ,

Owner controlled insurance companies called captives are growing at a record pace here in Delaware.   Small business owners that have enough size and premium to form their own insurance company are doing so. This change to the business insurance  marketplace is having a dramatic affect. Traditional insurers are starting to take notice as more large premium policies are moving into the captive space. Time will tell how far this may go but as I see it, captive insurance companies will continue to grow and take premium dollars out of traditional insurance companies pockets. Until next time be careful out there and know your risks. Blog by G. Kevin Nemith. President of CNC Insurance Assoc., Business Insurance , Small Business Insurance specialists serving Delaware, Maryland, Pennsylvania, and New Jersey.

If you own a business then you have paid business insurance. You can't open the doors without it. Many ask however why is it so expensive? You may be surprised to know it is not the 'greedy insurance companies". Business Insurance is expensive because there are claims, lots of them. Most insurance companies pay out 80% of every dollar they bring in. This doesn't give much of a margin for profit by the time you add in expenses. Here in Delaware, the business insurance rates may be slightly higher than average because we are a small state and there just isn't as many businesses for insurance companies to insure. Looking to keep costs down, business owners should look to specialists that insure businesses. Thats where we come in, so don't hesitate to call. Until next time be careful out there and know your risks. G. Kevin Nemith, Agent, Broker,  CNC Insurance Associates in Dover Delaware is a specialist in business insurance and small bsuiness insurance, that can