Small Business Guide To Commercial Insurance

23 What If I Have Trouble Locating Insurance for My Business? Most businesses will have no difficulty obtaining insurance in the standard insurance market with the assistance of a qualified broker-agent. However, if your business has experienced significant losses, your business is considered to be engaged in high-risk operations (with a greater chance of claims frequency or severity), or you have recently started your business, you may not be able to locate insurance in the standard commercial insurance market. Your broker-agent can explain the options you may have in seeking and securing commercial insurance elsewhere. • Surplus Line Insurance When you have had three applications turned down from a licensed commercial insurance carrier (and have written documentation of the declination to insure) you can proceed to obtain insurance from the surplus line market. Sometimes referred to as the “non-admitted” market, surplus line companies offer insurance to businesses that cannot find insurance in the standard line insurance market. While these companies are not licensed by the CDI, they do have to go through an approval process that includes providing evidence of minimum capital and surplus requirements. When these requirements have been met to the CDI’s satisfaction, the CDI may approve the company to conduct business in California and subsequently add them to the List of Eligible Surplus Line Insurers (commonly referred to as the LESLI list). A surplus line company can only be accessed through a specially licensed broker. The broker must have a surplus line license issued by the CDI in order to sell surplus line insurance. Before purchasing insurance from a surplus line insurance company, your broker must provide you with a disclosure notice under CIC Section 1764.1 that the insurance you are buying is being issued from a surplus line company.