Surplus Lines Gl Not Being Accepted

Sep 11, 2015

  1. mattt
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    mattt New Member

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    As anyone dealt with a municipality not accepting surplus lines insurance as proof of valid insurance? I have a start up general contractor I couldn't get in with admitted carriers without experience as a General contractor so I had to go to the e&s market. The city of milwaukee is saying the insurance is no good because the company isn't licensed in the state. Anyone dealt with this or have options?
     
    mattt, Sep 11, 2015
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  2. AZDave
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    AZDave Guru

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    The carrier requirments should be spelled out in your customers contract with them. Get your eyes on it. No uncommon to see minimum rating requirements of A or A-.

    Obviously the company is licensed to do business in the state. One would think the GA would have placed it correctly.

    Real pain if you had to start all over, or worse yet, have some other agenct take care of it for him.

    Good Luck
    Dave
     
    AZDave, Sep 12, 2015
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  3. Arnage150
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    Arnage150 Guru

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    Sometimes you can get a cut through endorsement if the excess company is owned by an admitted company. Or if they have another arm that is admitted. Ask the underwriter. Its not common so you have to push. A cut through allows you to put the admitted company on the cert.

    I've seen this requirement in a lot of contracts but never seen a City call someone out on it. Are you sure its not the insured questioning it or the insured's attorney? Sometimes because of the nature of the work an admitted company isn't available at any premium. Also just because its non admitted doesn't mean it cant be a good policy form.
     
  4. mattt
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    mattt New Member

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    the cut through endorsement might work because the parent company is admitted. This is super frustrating. The city attorney said it wasn't good enough. Still working on this today. Thanks for the info.

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    I was able to get the city to accept the surplus lines insurance for now but said they would revisit it with some insurance consultant in the future. This at least ends the cease and desist put on my client. I used endorsement form s901 notice of assumption endorsement stating a company that is admitted will cover any losses if the writing company becomes insolvent. That's a huge weight of the chest and hopefully I'll keep my client. I'm glad they sprung this on me last Friday afternoon so I had to stew on it all weekend and waste my entire Monday.
     
    mattt, Sep 14, 2015
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  5. Arnage150
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    Arnage150 Guru

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    I'm glad it worked out.
    I hate attorneys who think they know more about insurance then you.
     
  6. AZDave
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    This is great info. I write a lot of contractors and have not run into this, yet. Now I know. The old 'cut through endorsement'.
     
    AZDave, Sep 15, 2015
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