This topic covers coverages outside the core property, liability, auto and workers' comp policies: umbrella and excess liability, flood, inland and ocean marine, crime and fidelity, and surety bonds. The national guide covers the forms. Colorado adds two sets of rules here: bail bonds, which are a form of surety written by casualty producers, and the Colorado FAIR Plan.

The national concepts in brief

• An umbrella adds excess liability limits over the underlying policies and can cover some claims they exclude.
• Flood is excluded from standard property forms. It is written through the National Flood Insurance Program or private flood markets.
• Commercial inland marine covers property in transit, movable equipment and specialized goods not tied to one location.
• A fidelity bond covers an employer's loss from employee dishonesty. A surety bond has three parties: the principal who must perform, the obligee who is protected, and the surety that guarantees performance.

Colorado bail bond rules

• License and appointment: a bail producer holds the Casualty line of authority and must be appointed by a bail insurance company. Bail is the only line for which the Division of Insurance tracks producer appointments.
• Pre-appointment education: at least 8 clock hours on bail bonding (court system, ethics and bail law) plus 16 hours of bail recovery training (C.R.S. 10-2-415.5(2)(c)).
• Appointment renewal: each active bail appointment renews on October 1 of the renewal year. An appointment not renewed by then expires (10-2-415.5(3)).
• Premium limit: no more than the greater of $50 or 15% of the bail amount (10-2-707(1)). The premium is fully earned when the defendant is released from custody (10-2-707(3)).
• Records: transaction documents are kept for three years after the bond is discharged and collateral returned (10-2-705(5)).
• Unfair practices (10-3-1104(1)):
  • Failing to post the bond within 24 hours, and then not refunding all money and returning collateral within seven days.
  • Soliciting bail business in or around jails, courts or other places where prisoners are held.
  • Paying jailers or court employees for referrals.

Colorado FAIR Plan

• Purpose: to provide property insurance, including commercial property, when coverage isn't available from admitted insurers (C.R.S. 10-4-1804(2)).
• Why it was created: the legislative declaration points to more frequent natural disasters, including major wildfires such as the 2021 Marshall fire, which put pressure on the property market (10-4-1802(1)). The plan was created by legislation in 2023.
• Membership: every admitted insurer that sells property insurance is a member as a condition of its authority. Members share the plan's expenses, income and losses (10-4-1803(5), 10-4-1804(1)).

Exam traps

• A bail producer needs casualty authority plus a bail insurer's appointment. The premium cap is the greater of 15% or $50.
• Bail training is 8 + 16 hours, and appointments renew on October 1.
• The FAIR Plan writes commercial as well as residential property, and every admitted property insurer must be a member.