Admitted vs Non-Admitted Carrier

Cascade Cliff Adventures, a rope-course and zip-line operator in Bend, Oregon, needed $1,000,000 per-occurrence / $2,000,000 aggregate general liability. Because zip-lines and high-ropes are considered hazardous recreation, three admitted carriers declined the risk outright, so the retail agent documented a diligent search and moved the account to the excess and surplus market. A non-admitted (surplus lines) insurer quoted a $34,000 annual premium with a $5,000 per-claim deductible, versus the roughly $18,000 an admitted carrier would have charged for an ordinary retail shop that it was actually willing to write.

On top of the $34,000 premium, the placement added a 2.1% state surplus lines tax of $714 and a $250 stamping fee, bringing the total to $34,964. The admitted comparison would have carried a small guaranty-fund assessment instead. Two seasons later, a guest fell 30 feet after a harness failure and sued. The non-admitted insurer accepted the claim, spent $145,000 on defense counsel and experts, and settled for $625,000 against the $1,000,000 limit, so the client paid only the $5,000 deductible.

The trade-off surfaced the following year: the surplus lines carrier filed a non-renewal, raised the renewal indication to $52,000, and imposed a $25,000 assault-and-battery sublimit. Had this been an admitted carrier that later became insolvent, Oregon's guaranty fund would have backstopped an unpaid claim up to the statutory cap of $500,000 — protection a non-admitted policy does not include. Cascade budgeted the $52,000 renewal because no admitted market would touch the exposure.