To understand what E&S policies are, let's define standard or admitted insurance policies.These policies are created by insurance carriers that are licensed with the state and contribute to the state guarantee fund. This fund pays insurance losses if an insurance carrier is unable to or becomes insolvent.
E&S insurance carriers, also referred to as non-admitted carriers, are different from standard or admitted insurance carriers in several ways:
- They are not required to be licensed with the state but they can still do business within the state
- The carrier's insurance agents must have an additional state-specific E&S license to work in each state
- An E&S carrier typically writes classes of business that admitted carriers will not
- E&S carriers do not contribute to the state guarantee fund and are not backed by the guarantee fund
- E&S carriers are not bound by regulated rate and policy form giving them the flexibility to customize coverage and make changes without the cost and restriction of the state filing process
- E&S carriers provide coverage to classes of business that are considered “outside the box” or “unusual”
Why are some Insurance Canopy policies E&S policies:
- To provide customized coverages specific to Insurance Canopy's customers
- To lower costs by eliminating the need to file the rates and forms with the state
- It allows us to respond to industry needs with less “red tape”
