When purchasing insurance, many people focus on the coverage itself: the limits, the price, and whether their specific risks or operations are included. While these things are important, there's another factor that should be taken into consideration: Who is financially backing the policy? Understanding this piece of the insurance puzzle can make a major difference, especially should you need to file a claim.
The role of the insurance carrier:
When you purchase a policy through an agency like SIA, you're actually working with two different parties:
- The insurance agent (that's us!) helps you choose the right policy, issues certificates of insurance, initiates the claims process, and assists you with questions along the way.
- The insurance carrier is the company that financially backs the policy. They are the ones responsible for paying claims when something goes wrong, which is why their financial stability is so important.
The importance of having a financially stable carrier:
Insurance exists to protect you from financial loss. If a claim occurs, the expectation is that the carrier will have the resources to pay for damages, legal defense, and/or settlements. If the carrier is not financially stable, the promise of covering your claim becomes less certain.
A strong, well-backed carrier is better equipped to do the following:
- Pay claims reliably
- Handle large and/or unexpected losses
- Defend policyholders in legal situations
- Continue operating even during challenging economic conditions
Sometimes, cheaper policies come from carriers that aren't strong financially and/or have less experience with the industries they insure. While those policies may appear similar on paper, the difference often becomes clear when a claim occurs. We have seen one such company fold and disappear in the recent past, which is not what you want to see as an insured.
Working with a financially stable carrier helps ensure your coverage is supported by a company capable of standing behind the promises made in the policy.
Understanding carrier ratings:
One way to evaluate an insurance carrier's financial strength is through A.M. Best ratings, which assess an insurer's financial stability and ability to meet its obligations to policyholders. SIA works with carriers rated A (excellent), XV ($2 billion or greater in policyholder surplus) by A.M. Best. The "A" rating reflects financial strength, while the "XV" rating indicates a policyholder surplus of $2 billion or more. These ratings are key indicators of the resources available to pay claims.
Why this matters to our clients:
For performers, mobile vendors, and event planners, insurance needs are unique. Because of this, it's especially important that the coverage provided is backed by a reputable and financially sound carrier that understands those risks.
Simply put, the financial strength of the carrier is what makes the protection behind your policy real.
Our approach:
At SIA, our goal isn't just to provide coverage. We want to provide coverage you can rely on, should you ever need it. That's why we work with established carriers that have the financial strength to support the policies we offer.
Insurance should provide peace of mind. Knowing your policy is backed by a strong, reputable insurer helps ensure that protection is there when it matters the most.
If you have any questions, please reach out to our office via email at info@specialtyinsuranceagency.com or phone at 715-246-8908.
