New York contractors face some of the toughest insurance requirements in the country. With Labor Law exposure, high-risk job sites, and strict owner/GC demands, General and Excess Liability insurance is non-negotiable. But these policies, especially when written through surplus lines carriers, can cost $50,000, $100,000, or more per year.
To manage cash flow, many contractors turn to premium financing. It’s often necessary—but if mishandled, it can trigger cancellations, penalties, and even job shutdowns.
Here’s what contractors need to know about financing surplus lines policies the smart way—and how BGES Group can help you avoid costly mistakes.
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How Premium Financing Works for Surplus Lines
When you finance a surplus lines General and Excess Liability policy, you don’t pay the full premium upfront. Instead, a premium finance company pays it for you, and you repay them in monthly installments.
Typically, they require a 25% deposit. That’s because surplus lines policies often include minimum earned premium provisions (usually 25–30%), meaning even if the policy is canceled early, the carrier keeps that minimum amount. The finance company needs to ensure that if the policy cancels, it can recover this non-refundable portion.
Some finance companies may accept a 20% deposit, but that depends on your credit history, business size, and your broker’s relationship with the lender. BGES Group helps clients explore the lowest deposit options available.
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Reduce Interest by Delaying Fund Release
One smart way to reduce your total financing cost is to delay the release of funds from the finance company to the insurance carrier.
Normally, once you sign the finance agreement and make the down payment, the finance company sends the full premium to the insurance company. But many carriers allow delayed funding—up to 20 to 25 days after the policy’s effective date.
Why does this matter? Because interest doesn’t start accruing until the funds are released. If your project isn’t starting immediately, delaying funding helps reduce the financed amount and lowers your total interest cost.
BGES Group frequently arranges these delayed releases to help contractors minimize interest and align payments with job cash flow.
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What Happens If You Miss a Payment?
Missing a payment triggers a Notice of Intent to Cancel (NOIC) from the finance company. This is a formal warning that your policy will be canceled if you don’t pay by the cancellation date listed—typically 10 days from the notice.
Most contractors don’t realize that once the NOIC is issued, a 5% penalty is often added to the installment amount owed. On a large premium, this can mean thousands in extra cost just for missing a deadline.
To avoid cancellation, you must pay the full amount due—plus the penalty—by the cancellation date on the NOIC. If you don’t, the finance company can legally instruct the insurance carrier to cancel your policy, and in New York construction, that could mean:
• Immediate job site shutdowns
• Contract violations
• Revoked COIs
• Legal exposure under Labor Law
BGES Group helps contractors respond quickly to NOICs, negotiate with finance companies when possible, and keep policies active.
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What If Your Payment Bounces? (NSF)
An even worse situation? You make a payment to avoid cancellation—but the check or ACH transfer bounces due to insufficient funds (NSF).
From the finance company’s point of view, this is a major red flag. You’ve already missed the deadline, and now your replacement payment is invalid.
In most cases, they’ll require you to pay with certified funds, like a wire transfer or bank check. Some finance companies will even require advance payment of the next installment before they reinstate the policy.
This creates a coverage gap, which can cost you jobs, delay payroll, and tarnish your reputation with project owners or GCs.
Avoid NSF events at all costs. And if you’re in trouble, contact BGES Group immediately—we can step in and help limit the damage.
How BGES Group Helps You Navigate Financing
At BGES Group, we specialize in helping New York contractors secure the right coverage with the right financing terms. We work with multiple surplus lines carriers and premium finance companies to:
• Lower your interest rates
• Explore 20% deposit options
• Delay fund release to reduce costs
• Respond quickly to NOICs and late payment issues
• Guide you through NSF or cancellation problems
We know how finance companies think. We understand surplus lines underwriting. And we work with contractors every day to protect their coverage and control their costs.
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Who We Work With
BGES Group works with contractors across New York, New Jersey, and Connecticut—including:
• Scaffolding and masonry contractors
• Demolition and excavation companies
• Painting and drywall subcontractors
• High-rise builders and general contractors
• Site work, concrete, and street/road contractors
*Everyone
We understand New York Labor Law and what insurance terms owners and GCs require. Whether you’re just starting out or managing multi-million-dollar projects, we can structure your insurance and financing to keep your business safe and scalable.
Contact BGES Group Today
If you’re looking to finance your General or Excess Liability insurance policy—or need help dealing with a finance company issue—we’re here to help.
BGES Group
📞 Gary Wallach – 914-806-5853
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Final Word: Don’t Let Financing Derail Your Business
Financing your insurance premiums is a smart way to keep cash flowing—as long as you manage it right. One missed payment, one NSF, or a poorly timed fund release can cost you thousands and put your business at risk.
With BGES Group in your corner, you can protect your projects, reduce your costs, and avoid expensive missteps. Let us help you finance smarter—and keep your coverage rock solid.