When you’re in the swimming pool industry, your business comes with unique risks and choosing the right insurance coverage is essential to keeping things running smoothly. But as you look around, you might come across two terms that sound confusing: admitted insurance carriers and surplus lines insurance carriers.
So, what do they actually mean? And more importantly—how do they impact your protection as a pool pro? Let’s break it down.
What is an Admitted Insurance Carrier?
An admitted insurance carrier is licensed and approved to operate in your specific state. These companies are closely regulated by your state’s insurance department and must follow strict rules about pricing, claims handling, and financial practices.
Here’s why that matters to you:
State protection: If an admitted carrier becomes insolvent (runs out of money), your state’s insurance guaranty fund steps in to help pay your claims.
Standard coverage options: They typically offer more traditional insurance policies that meet your state’s legal and regulatory standards.
Consumer safeguards: Admitted carriers must go through a formal approval process for their rates and policy forms, which gives you a layer of oversight.
What is a Surplus Lines Insurance Carrier?
Now let’s talk about surplus lines carriers. These are insurance companies that are not licensed in your state—but they are still legally allowed to offer policies when no admitted carrier is willing to take on a specific risk.
Why would that happen? Some businesses, especially in niche industries like pool construction or pool service, present higher risks or need custom policies that fall outside the “standard” coverage box.
Here’s what you should know about surplus lines carriers:
They cover unique, high-risk, or hard-to-insure situations.
They’re not subject to the same state regulations, so they can offer more flexibility.
BUT—there’s no guaranty fund protection. If they go out of business, the state won’t step in to cover claims.
These policies are often brokered through a licensed surplus lines broker who ensures compliance with state filing requirements.
Financial Strength Matters—No Matter the Carrier
Whether you go with an admitted or surplus lines carrier, always check the company’s financial strength rating. This tells you how likely the insurer is to meet its claims obligations.
One of the most trusted rating agencies is A.M. Best. Look for companies with a rating of:
“A” (Excellent) – Indicates strong financial health and a reliable ability to pay out claims.
An “A” rating is typically one of the top-tier indicators of an insurer’s credibility and stability. Other agencies like Moody’s, Fitch, and Standard & Poor’s also rate insurance companies, but A.M. Best is the go-to for the insurance world.
Which One is Right for You?
It depends on your business and what kind of coverage you need:
Choose an admitted carrier if you want added protection through your state and need standard coverage.
Consider a surplus lines carrier if your business has unique needs or higher risks that make it hard to get coverage through traditional insurers.
No matter which route you take, always work with an expert who understands the pool industry—and always check the company’s financial strength rating first.
At The SPPA, we help pool professionals like you navigate the world of insurance, business protection, and industry knowledge. Choosing the right insurance partner is just one of the many ways you can safeguard your business—and we’re here to help every step of the way.
Contact us to learn more about your options and become a part of the Swimming Pool Pro Alliance today!