What should a surplus lines broker do if unable to locate coverage with an admitted insurer?

When a surplus lines broker is unable to locate coverage with an admitted insurer, the appropriate course of action is to complete the diligent search documentation and seek coverage from a surplus lines market. This approach is crucial because surplus lines insurance is specifically designed for situations where standard coverage is not available through admitted carriers.

In the surplus lines market, brokers can explore alternative insurers that may offer necessary coverage options that are more tailored to unique risks or circumstances that admitted insurers are unwilling to insure. The requirement for diligent search documentation serves as evidence that the broker has made a concerted effort to find coverage in the standard market prior to seeking surplus lines options. This documentation helps ensure compliance with state regulations, which are designed to protect consumers and ensure that all possible avenues have been explored before resorting to the surplus lines market.

This action aligns with regulatory practices and helps maintain the integrity of the insurance process, making it clear that the broker is following proper protocols to secure coverage for their client appropriately.