The Option When No Licensed Insurers Will Cover Your Business
More businesses are finding fewer insurers willing to write their policies for certain types of coverage that are seeing rapidly escalating claims costs, particularly in some liability lines and property insurance in areas with exposure to natural catastrophes.
When no insurers licensed in your state are willing to write a policy, we, as your agent, have to go to another market made up of insurance companies that are not licensed or regulated by your state government. It's called the surplus lines (or "non-admitted") market, and it can be a valuable alternative for insurance buyers.
As insurers get more selective writing some risks, it's important for you as an insurance buyer to understand this market.
It is legal in every state for an unlicensed (non-admitted) insurance company to sell coverage. We can access those insurance companies by working with specially licensed brokers who are regulated by the state.
Unlike standard insurance companies, non-admitted companies do not have to obtain approval from state regulators for the policy forms they use or the rates they charge.
Why use a non-admitted carrier?
Why would someone buy insurance from an unregulated company? Because it might be the only one offering coverage for your type of risk. Non-admitted companies insure businesses that standard insurers avoid, such as:
Businesses in sectors where the cost of claims is suddenly rising, resulting in fewer licensed insurers willing to write policies.
Businesses and industries with histories of frequent or large claims.
Businesses with the potential for very severe losses, such as amusement parks or manufacturers of power tools.
Homes and commercial properties that are vulnerable to extreme events such as hurricanes and wildfires.
Properties that require substantial amounts of insurance.