What is Diligent Search Report?
A Diligent Search Report is a formal document used in the insurance industry to show that a thorough attempt has been made to find coverage in the admitted insurance market before turning to non-admitted or surplus lines insurers. This process is often required by law or regulation, especially when placing coverage with a surplus lines carrier.
The report details which insurers were contacted and the reasons they declined to offer coverage. It ensures transparency and compliance with state insurance rules around accessing the surplus lines market.
Who Needs It
Diligent Search Reports are typically required by:
- Surplus lines brokers placing coverage with non-admitted carriers
- Businesses seeking specialized or high-risk insurance not readily available in the standard market
- Insurance regulators for documentation and compliance audits
They are especially relevant in states that have strict surplus lines regulations, and may also be required for certain commercial policies like excess liability, professional liability, or niche property coverage.
What It Typically Covers
A Diligent Search Report generally includes:
- Names of admitted carriers contacted
- Dates of contact and communication method
- Reasons each carrier declined coverage (e.g., risk outside underwriting guidelines)
- Broker or agent details who conducted the search
- Signature or attestation verifying the report’s accuracy
Common Exclusions and Limitations
This report does not guarantee approval to use a surplus lines carrier. It simply documents that a reasonable effort was made to find coverage through admitted insurers. Common limitations include:
- Incomplete or outdated contact attempts
- Lack of documentation or broker attestation
- Not meeting state-specific submission requirements
Factors That Influence Cost
The cost of coverage placed through a diligent search process can vary based on:
- Type and complexity of the risk
- Number of admitted markets available
- Urgency of placement and market conditions
- Broker experience and access to surplus lines markets
While the report itself doesn’t carry a direct cost, it affects the placement process and may influence premium due to limited market availability.
Proof of Insurance & Compliance
Once coverage is bound through a surplus lines carrier, documentation including the Diligent Search Report is often required to demonstrate compliance with state laws. States differ in how they regulate surplus lines, but most require some form of report filing and recordkeeping to ensure the standard market was considered first.
How to Get a Quote
If you're looking for coverage that may require a diligent market search, we can help you navigate your options and ensure compliance. Get a quote today.
Frequently Asked Questions
Is a Diligent Search Report required in every state?
No, requirements vary by state. Some states mandate it before placing coverage with a surplus lines insurer, while others have different procedures.
Can I complete a Diligent Search Report myself?
Typically, a licensed broker or agent must complete and sign the report, especially when submitting it for regulatory compliance.
What happens if I skip the diligent search process?
Skipping the process may lead to non-compliance with state laws and could jeopardize the validity of your insurance coverage.
How many insurers must be contacted for a diligent search?
This varies by state. Some states require three or more declinations from admitted carriers before using a surplus lines provider.
Does completing a Diligent Search Report guarantee coverage?
No, it only documents the effort to find admitted coverage. Final approval depends on the surplus lines carrier’s underwriting decision.
Still have questions? Talk to a local insurance expert.