Have you ever been on a road trip, out in the country 50 miles from nowhere, when you go over a hill, only to find yourself confronted by blinking yellow lights warning you to slow down?
A similar situation occurs in the agency business: day-to-day renewals and new business are going smoothly, and then the need to place an account with an E&S market arises. This is when the caution lights need to come on!
Please slow down and consider these items:
- Excess and Surplus carriers don’t have to follow the same rules admitted carriers do. For instance, they often change coverages at renewal and are not obligated to inform the retail agent or the client.
- The E&S broker is contracted with the E&S carrier, not the retail agent, so the retail agent is limited with respect to confirming coverage with the client. For example, the retail agent may not have the authority to bind coverage or issue certificates.
- As the insurance market hardens, carriers’ financial ratings become more important. It is not the E&S broker’s responsibility to determine if the carrier’s rating is acceptable – that responsibility resides with the retail agent.
Click here for more thoughts on dealing with E&S brokers and carriers.
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