Friday, December 20, 2002
The post 9-11 insurance market has sent Atlantic County government's premiums for workers compensation soaring according to Atlantic County Executive Dennis Levinson.
Levinson recently signed a contract authorizing the purchase of excess workers compensation coverage for $165,000. This represents an increase of 348% from last year's premium of $47,509. "As we prepare the 2003 Atlantic County budget we realize how the rising costs of all insurance is creating a difficulty for Atlantic County and all public entities," Levinson said.
The county solicited quotations for an excess workers compensation policy. Under this type of coverage, the county would be responsible for the first $500,000 of loss for each incident throughout the life of the claim and is covered for costs from $500,000 up to $25 million.
Only one agent responded to the request for quotations. Most agents contacted by the county stated that premium increases of 500% are common and that no favorable turn in the hard insurance market is anticipated in the foreseeable future.
"The tragic events September 11, 2001 have led to new underwriting exposures and concerns that have had a dramatic impact on insurance pricing and availability," Levinson said. "This, along with insurance companies' loss of investment income due to the downturn in the stock market, has resulted in skyrocketing premium costs."
"Traditionally, Atlantic County government has been a low-premium and low- exposure risk. However, insurance agents throughout the state have told us that since 9-11, an account like ours has gone from being one of the easiest to place to one of the most problematic," Levinson said. "Fortunately, we have taken steps over the past few years to prudently manage our costs of risk by accepting higher retentions and specific policy limits instead of the usual unlimited statutory benefits. The county has also committed resources toward expanding its risk management program to help limit losses."
For more information please contact Howard J. Kyle, Chief of Staff, at (609) 343-2223.