Alternative Market Insurance

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Alternative market insurance typically refers to property and casualty insurance. Find out about alternative market insurance with help from an experienced insurance professional in this free video clip.

Part of the Video Series: Insurance Questions
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Video Transcript

My name is Susan Combs, and today we're going to talk about alternative market insurance. With alternative market insurance, really this typically refers to the property and casualty side of the business. So property and casualty in terms of your business is going to be like general liability, errors and omission which sometimes people refer to it as professional liability, you know, things of that nature. So with that type of insurance, you have what's called admitted and non-admitted carriers. Those non-admitted carriers are usually kind of referred to as the alternative markets. So with admitted carriers, what that means is those carriers are licensed to do business in the state that your business is in and all the claims are backed by that state. So if say just for example like Travelers is admitted in the state of New York, if Travelers goes out of business and they are admitted in the state of New York, which they are, if something happens and somebody suffers a loss, then the state is going to be you know, provide the money to pay out that claim. If they are non-admitted, it doesn't mean that they are bad carriers but a lot of times if there is like a higher liability company or say a company that doesn't have any history or they have very low sales, they might have to go to a non-admitted carrier. It doesn't mean that claims aren't going to be paid out, but it is saying okay if that company goes out of business, then the state is not going to guarantee that those claims are going to be paid out. You know, I know a lot of people worry about that stuff but you really have to look at the carriers and talk to the brokers and they are going to tell you you know, what's going to be the bet bet. Because for example, Lloyds of London, very very huge huge company, they are not admitted in most states because they are a foreign entity but I can tell you that Lloyds of London is not going anywhere. So I would tell you that if you were looking at an alternative market, that would be a carrier that you could be comfortable in selecting. But that's really the difference. So when you are talking about the alternative markets, it's usually referring to non-admitted carriers in that state.


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