Coverages
Cyber Insurance
Protects organizations and individuals from financial and legal losses resulting from cyberattacks and data breaches, including first-party costs like data restoration and ransomware payments, and third-party liabilities such as customer notification and regulatory fines
Additional Insured
Extends limited coverage from the named insured's policy to a third party, typically for liabilities caused by the named insured's actions.
Protects the additional insured's own insurance from being used for a claim caused by the named insured's work. This preserves their loss history and premium rates.
Who is the Surety?
The surety is the party that provides a guarantee that the principal will fulfill their obligations to the obligee. Often, a financial institution, such as an insurance company, acts as a surety, pledging to pay the obligee if the principal fails to fulfill the conditions of the bond.
What is: Non-Admitted Carrier
A carrier not licensed in the state but approved to write business via surplus lines brokers.
They operate with more flexibility, allowing for coverage of high-risk or specialized needs that admitted carriers often decline, but this also means state guaranty funds do not back them, so policyholders have less financial protection if the insurer becomes insolvent.
What is: Audit, and what could happen if you don't comply?
is an insurer-requested review to reconcile the estimated figures (like payroll or revenue) used to calculate your premium with your business's actual operations and exposures. The audit ensures accurate premium pricing, prevents overpayment or underinsurance, and may result in a premium adjustment
Garagekeepers Legal Liability
Garagekeepers Legal Liability insurance protects auto-related businesses, such as repair shops and dealerships, from financial losses due to damage to customer vehicles while under their care, custody, and control. It covers events such as fire, theft, vandalism, or collision, and is crucial for businesses that must maintain trust with clients by protecting against potential damage.
Primary and Noncontributory
Establishes which policy pays first and ensures that the other policy, typically belonging to the additional insured, is not asked to contribute.
Offers a high level of protection by ensuring that the named insured's policy pays first and alone, preventing the requester's policy from being triggered at all.
Performance Bond
A surety bond is a guarantee that a contractor will complete a project according to the contract's terms and conditions, thereby protecting the project owner from financial loss in the event of the contractor's default. Issued by a third-party surety company, the bond is invoked if the contractor fails to perform, providing the owner with funds to hire another contractor and complete the work.
Diligent Effort / Affidavit Requirement
Ensures an insurer's risk was first sought from the admitted market before being placed in the surplus lines market, which is a less regulated alternative. An affidavit is a sworn statement required by many states, confirming that the surplus lines broker made a diligent, documented effort to find coverage from admitted carriers.
What is: Employers' Liability
Protects the employer by covering costs such as legal fees, judgments, and settlements if an employee sues for negligence or an injury not covered by workers' compensation.
Owned vs. Hired/Non-Owned Auto
The difference between owned and hired/non-owned auto lies in who holds the title for the vehicle being driven for work and what kind of insurance protects the company. An owned auto is a vehicle registered in your business's name, while hired/non-owned vehicles are used by employees or rented by the company.
A commercial auto insurance policy covers owned autos. This provides liability protection for accidents involving vehicles registered in your company's name.
Hired auto coverage is for vehicles a business rents, leases for a short term, or borrows for commercial use.
Non-owned auto coverage is for vehicles your business does not own, lease, or hire but are used for work purposes.
Waiver of Subrogation
Prevents an insurer from seeking reimbursement from a third party that caused or contributed to a loss after the claim has been paid.
Protects the at-fault party from being sued by another party's insurance company. This helps avoid litigation and preserve business relationships.
Janitorial Service Bond
is a type of surety bond that protects clients from financial losses due to theft by an employee of a cleaning service. While optional, bonds are often required by clients to ensure a business's reliability and trustworthiness. The bond protects the client, not the janitorial business, and typically covers losses from employee theft, with costs depending on the bond's coverage amount and the business's size.
Minimum Premium (Nonrefundable)
The smallest amount an insurance company will keep for a policy that is canceled early, regardless of when you cancel it. It covers the insurer's initial costs and risks, and can be a set percentage of the total premium, such as 25%, or up to 100%.
Owners Included vs. Excluded (WC)
Included owners on a workers' compensation (WC) policy receive medical and wage replacement benefits for work-related injuries, but this increases the policy's premium cost because their payroll is included in the calculation. Excluded owners avoid paying for their own coverage, which reduces the company's premium. They receive no WC benefits if injured on the job. They must cover medical costs and lost wages themselves, often relying on personal health insurance, which typically doesn't cover work-related injuries.
Professional Liability
Professional liability insurance protects businesses and professionals against financial loss from claims of negligence, errors, or omissions in the rendering of professional services. Also known as Errors & Omissions (E&O) or malpractice insurance, it covers legal defense costs and damages for alleged mistakes that cause economic harm to a client, even if the insured is not at fault. This coverage is crucial for professionals who provide services or advice, such as lawyers, accountants, architects, consultants, and IT professionals, especially when required by contract or state law
Umbrella Vs. Excess
Umbrella insurance provides broader coverage for claims that exceed the limits of primary liability policies, as well as new types of claims, such as libel or slander.
Excess liability insurance extends the liability limits of a specific primary policy without adding new types of coverage. The key difference is that umbrella policies can apply to multiple different types of primary policies, while excess liability policies typically apply to just one.
Fidelity bonds
Fidelity bonds provide reimbursement if one of your employees commits fraud, theft, or forgery against a client or your business. They are often required by client contracts.
Binding a Quote E&S: What’s Required? Name 3
Signed ACORD application, signed supplemental applications, signed surplus lines affidavit (if required), binding request or confirmation, and any subjectivities cleared.
What is: A Mod
A "mod" or experience modification (e-mod) is a factor that adjusts a business's base premium based on its actual claim experience compared to the average for similar companies. A mod below 1.0 (or 100%) provides a premium discount (a "credit"), while a mod above 1.0 results in a surcharge (a "debit"). The mod is calculated annually by comparing a company's past losses and payroll to the expected losses for its industry
Sexual Abuse & Molestation (SAM) Insurance
Protects organizations from financial losses resulting from claims of sexual misconduct, abuse, or molestation by their employees, volunteers, or representatives. This specialized coverage pays for defense costs and settlements, regardless of whether the allegations are factual, and is crucial for organizations working with children, the elderly, or other vulnerable populations.
Separation of Insureds Condition
Treats each insured on a policy as if they were the only one covered, preventing one insured's actions or misconduct from jeopardizing coverage for another "innocent" insured under the same policy. This standard provision in many liability policies ensures that coverage applies separately to each insured against whom a claim is made, providing cross-liability coverage and protecting against certain policy exclusions from applying to all insureds
License and permit bonds
Guarantee that a business will complete a project in accordance with regulations and industry standards.
What are 3 different taxes/fees you would see on an E&S proposal?
Stamping Fee
Surplus Lines Fee
Policy Fee
Broker Fee
What is WC Stop Gap Coverage and the WC Stop Gap States (Monopolistic States)
where workers' comp is state-run and doesn't always include employer's liability insurance, creating a "gap" in coverage that stop gap insurance fills. in monopolistic states
“North Dakota, Ohio, Washington, or Wyoming