Open Market Placement
Insurance placement negotiated individually with underwriters on a risk-by-risk basis, distinct from program or binding facility—typical for complex risks.
FAQs
- What distinguishes a 'manuscript' policy used in open market placement?
- A manuscript policy is custom-drafted for a specific insured rather than using a standard carrier form. Open market placement often involves manuscript endorsements modifying standard ISO or carrier forms, and for the most complex risks, fully manuscript policies drafted to reflect the specific negotiations. Manuscript policies provide the most tailored coverage but require careful review by legal and risk management professionals to ensure they achieve the intended protection.
- Is open market placement always more expensive than program placement?
- Not necessarily. For risks that fit a program well, programs often provide efficient pricing. But for risks that don't fit programs cleanly, open market placement may yield better terms because underwriters can credit unique risk management features, favorable loss history, or other factors that a program's standardized underwriting cannot accommodate.
- How does a broker select which markets to approach in an open market placement?
- Experienced brokers maintain detailed knowledge of which underwriting markets have appetite for which risk classes, their current pricing posture, capacity availability, and service quality. Market selection involves choosing markets most likely to provide competitive terms, identifying the strongest lead underwriter, and balancing the number of markets approached against the risk of over-shopping (which can signal that terms obtained elsewhere were unsatisfactory).
Related Terms
Program Business
Insurance written under delegated underwriting authority for a defined, homogeneous niche managed by an MGA or program administrator with specialized expertise.
Lloyd's of London Market
A specialist insurance and reinsurance market in London where syndicates write risk on behalf of capital providers—the world's leading specialty marketplace.
Wholesale Insurance Distribution
The channel where surplus lines brokers act as intermediaries between retail agents and specialty or non-admitted markets retail agents cannot directly access.
Delegated Authority
The contractual underwriting, binding, and claims authority a carrier grants to an MGA or coverholder to write risks without prior carrier approval.