Small Business Guide To Commercial Insurance

24 Although surplus line insurers must follow the Fair Claims Settlement Practices Regulations (regulations that govern how insurers handle claims), the CDI has limited jurisdiction over the operation of surplus line insurers. If the company becomes insolvent (goes bankrupt), your only course of action will be through the courts. The California Insurance Guarantee Association (CIGA), which protects claims with admitted insurers, does not apply to surplus line insurers. A surplus line broker should be able to supply information on the financial solvency of any surplus line company that it represents. You can also contact the many independent rating organizations that analyze insurance company solvency by using the information provided in the“Resources” section of this brochure. After checking the financial solvency of the surplus line company, you may also wish to verify that the surplus line company is approved by the CDI and currently on the LESLI list. You can contact the CDI through the information located in the “Talk to Us” section at the end of this brochure to check if a surplus line company is on the LESLI list. • California FAIR Plan The California FAIR Plan has been in operation since 1968 to provide basic property insurance to property owners who are unable to obtain insurance in the standardmarket. Although the California FAIR Plan was established by the legislature, it is not a state agency. It is an association of all property insurers licensed in the state, who participate according to the percentage of property insurance they write in California. The California FAIR Plan was established to assure stability and accessibility of property owners to property insurance. The majority of California FAIR Plan business is in designated urban, inner city, and areas subject to destructive wildfires. While the California FAIR Plan primarily writes policies for personal property holders (homeowners), they do write a small percentage of policies for commercial property owners. Any broker-agent can help you place a commercial property policy with the California FAIR Plan. You may also request an application and informational pamphlet from the California FAIR Plan directly by utilizing the contact information available in the “Resources” section of this brochure.