Federated Insurance Company John Matthew McCloud Incorrectly written policy, lied about trade reltionship Newport News Virginia

John Matthew McCloud came to our small auto repair business (3 employees) in Nov 2014 representing that his company, Federated Insurance had a trade relationship with NAPA Auto Parts and that they were "experts" at small business insurance and specifically small auto repair shops. Since we also have a trade relationship with NAPA, we trusted him. He wrote us a workers comp and general policy, all the while telling us how much better and cheaper it would be. The original Work Comp quote was 2450$ for the year. The general liability quote was around 2000$/year. We thought the rate was great and signed up. 

In April they conducted an audit, and concluded that our office manager, James, who works in a seperate, closed off office from the service area and only does paperwork and talk to customers, could not be a "clerical" employee. When I contacted the agent, Mr McCloud, in reference to this matter, he indicated that he was working with the auditors to resolve the issue. He later contacted me to tell me that our shop had its premium increased because it was 5 bays, not 3 (our shop is only 3 bays, I'll be glad to provide pictures) and that our office employee, James had to go under the technician rate because "The state of Virginia did not offer a clerical position for a company our size in our field." This is also a lie. The resulting increase in premium for the year was 1400$!!! Almost 60% over our initial quote! 6 months of that premium is actually now due because the audit premiums are billed from the policy start date even though their quote was wrong!

Pursuing channels through the BBB and Federated's internal customer satisfaction process yielded only access to rude, arrogant people that acted like we are the problem. In addition to this report and the BBB, we are also communicating with NAPA to let them know that Federated is illegally using their name. We may also have to communicate with an attorney to finally resolve this issue.

  Since Mr McCloud is a certified and employed professional in his industry, he and the company he represents bear the obligation of correctly writing the initial quote. Since he wrote it wrong, that is their fault and they cannot collect on that amount. We ended the policy after recieving notification of the change so we only owe Federated what was originally quoted.