Bankruptcy Premium Financing

Can insureds in bankruptcy obtain premium financing? Are there special forms required for premium finance loans for insureds in bankruptcy? What are the agent’s responsibilities? These are all important questions that will be addressed.

The most important question on this topic is can an insured in bankruptcy finance their insurance premiums? The answer in most cases is YES. It is critically important to ask the insured if they are in bankruptcy or currently involved in a bankruptcy proceeding. In most premium finance agreements, the Agent or Broker representations specifically asks if there are any known bankruptcy or insolvency proceedings so it is part of the legal loan document. If the question is not asked, it could lead to a potential E&O exposure.

If the answer to that question is yes, that information needs to be relayed to the premium finance provider so the account can be properly underwritten. After underwriting and upon providing the premium finance agreement, the premium finance provider may include additional documents that need to be signed in order for the premium finance loan to be accepted and funded. This may require more time between underwriting and funding so please keep that in mind when these situations arise. Each case can be unique so be sure to have an open dialogue with the premium finance provider every step of the way in the underwriting process.

If you have any questions about a bankruptcy situation or would like to discuss an account that is in or is contemplating bankruptcy, please contact your Sales Executive directly or Premium Finance Brokerage at 866-381-6501 or at