When should you buy insurance?
April 29, 2022
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An Admitted carrier is “backed” by the California Insurance Guarantee Association (CIGA) Fund. The Fund would cover the claim up to you policy limit or $500,000 in liability; whichever amount is lower, in the case that the carrier becomes insolvent.
A ‘Non-Admitted” carrier has been approved by the Department of Insurance to operate on a “Non-Admitted” basis but is not “backed” by the State Guaranty Fund. Financial stability of the carrier becomes very important when they are transacting business on a “Non-Admitted” basis. This can be investigated by using companies such as A.M. Best who are in business for the sole purpose of researching insurance carriers and compiling statistical information.
One point that should be mentioned is that financial strength is not always related to the carriers Admitted or Non-Admitted status. Furthermore, there are more regulatory restrictions placed on the Admitted carrier. Some of the largest insurance companies in the world choose to transact business in California, and in all states, on a Non-Admitted basis.
This is an endorsement which names others as an insured to your policy. It is a requirement by almost all carriers that if you hire a Sub-Contractor – you must have your Company named as “Additional Insured” on their policy. Failure to comply with this requirement can get you Cancelled or could affect any claim should one arise. A few more examples of additional insured requests are:
*If you are a contractor and plan to do work for a homeowner, they may ask to be named as additional insured to your insurance policy. This is the homeowners way of protecting themselves from any liability arisng out of your work on their property.
*If you rent an office for your business, the property owner may require that you name him/her to your insurance policy as additional insured. This is the property owners way of protecting him/herself against claims that may arise from your business operations in the rented office space.
*If you plan to rent a private or public facility to hold an event, the private owner or public entity, may require additional insured status before the facility can be used.
In most cases (but not all), there is an additional premium charged by the insurance carrier for this endorsement. Your insurance broker/agent does not have control over the amount charged. Some insurance carriers offer “Blanket” additional insured. This option could prove to be less costly in the long run, if you require many additional insured endorsement throughout the policy year.
We try to obtain as much information as we can from you during your first conversation. with us. However, the insurance company underwriter may have additional questions.
With this information, we will be able to determine what carrier(s) will best fit your needs and provide you with the best price. In some cases; it will take a few phone calls and completing several applications to get you the best quote. The questions vary, depending on the type of insurance you need. For instance, we will not ask you to provide information about your companies vehicles, if you need a quote for Workers Compensation.
Here are some examples of questions we may ask:
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The opinions expressed on this site are the opinions of the individual author and may not reflect the opinions of First Underwriters Insurance Brokers. All content appearing on this website is not meant to be exhaustive or construed as legal advice. Consult your licensed broker at First Underwriters to address specifics, possible concerns or compliance requirements.
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