There is more to choosing a commercial insurance company than just premium and coverage. Here are a few other factors to consider.
Admitted Insurance Company
Agents are required to attempt to place all business insurance policies with admitted insurance carriers, also known as standard carriers. The advantages are:
- Admitted insurance companies are required to follow state insurance regulations.
- There are protections in place to pay claims if an admitted insurer becomes insolvent.
- If an insured feels a claim was mishandled, there is recourse available with the state.
Admitted insurance companies typically offer package commercial insurance policies (so fewer policies are needed) with broader coverage and lower premiums. However, underwriting guidelines tend to be more stringent, so admitted carriers sometimes turn down higher risk or unconventional businesses.
Non-Admitted Insurance Company
If an admitted insurance company is not an option, agents will turn to non-admitted insurers, which are also known as non-standard insurers or excess/surplus lines carriers. These insurers typically will not work directly with agents, and instead work through insurance wholesalers. Premiums for commercial insurance are often higher, and coverages can be spread amongst multiple policies. Taxes are not built into the premiums, and show on a separate line item. The one advantage with non-admitted insurance carriers is that underwriting guidelines tend to be more liberal, so they will usually insure those businesses admitted insurers will not.
Risk Retention Group (RRG)
Risk Retention Groups are similar to a non-admitted insurance company, except that they are owned by members. RRG’s do not receive a rating from AM Best, so it can be difficult to determine financial strength/stability.
AM Best Ratings
AM Best rates insurance companies based on their ability to pay claims. There are financial strength, stability and size ratings. Remember that this does not gauge the insurer’s likelihood of paying a claim, or their claim service, it only gauges their ability to pay claims, based on a financial analysis.
Looking for Business Insurance in Greater Seattle? Contact Chris Elliott Insurance Agency!
Our agency always approaches admitted insurance companies for business insurance first to find the very best rates and coverage. But if admitted insurers are not an option, we work regularly with non-admitted carriers as well.