TL;DR
Comparison
Should I insist on an admitted carrier?
Whose decision: Operators whose lease or loan documents specify carrier requirements, and anyone comparing two structurally different quotes.
Last updated
| Factor | Admitted carrier | Surplus lines |
|---|---|---|
| State licensing | Licensed in the state | Not licensed in the state; eligible surplus lines insurer |
| Form and rate filing | Filed and approved | Not filed; forms can be tailored |
| Guaranty fund protection | Yes | No |
| Ability to negotiate terms | Limited by the filed form | Substantial, which is how a full abuse limit or a punitive wrap becomes available |
| Taxes and fees | Included in the premium | Surplus lines taxes and stamping fees added on top |
| Availability for senior care | Limited, and more so in hard states | The bulk of the market |
The recommendation
Insisting on an admitted carrier in this class will narrow your options considerably and will cost you the form flexibility that makes the terms worth having. The negotiability of abuse limits, punitive wraps and defense treatment is largely a surplus lines phenomenon, because an admitted filing would not permit the same variation.
What does deserve attention is the financial strength of the writing company, since there is no guaranty fund standing behind it, and whether any lease, loan or bond document requires an admitted carrier or a stated rating. Those requirements are frequently drafted for an ordinary commercial tenant and conflict directly with what this market will offer.
That conflict is far cheaper to discover before a document is signed than at the first renewal after, so raise it during lease or loan negotiation rather than treating it as an insurance problem later.
Follow-up questions
It carries no guaranty fund backstop, so the financial strength of the writing company matters more than it would on an admitted placement. That is a reason to look at the rating and the balance sheet, not a reason to avoid the market that writes your class.
Surplus lines placements carry state surplus lines taxes and, in many states, stamping office fees, which are added to the premium rather than included in it. Compare quotes on total cost rather than on the premium line alone.
Go deeper
Other comparisons
Should I pay more for defense outside the limit?
Which trigger should a senior care liability program be written on?
Should we put our program in a risk retention group?
Is a captive the right structure for us, or should we stay on a guaranteed cost program?
Is a per location aggregate worth the extra premium?
Should general liability and professional liability sit on one policy?
Free coverage review
Send the declarations page and a specialist returns an item-by-item read within one business day.