Your landlord's attorney flagged your certificate of insurance. The policy is active. The limits look right. But something about the carrier itself isn't working, and now your move-in date or lease renewal is in jeopardy.
If your coverage came through a risk retention group (RRG), this situation is more common than most buyers expect. It doesn't mean your coverage is fake or that it wouldn't respond to a real claim. It means commercial leases are written around a specific type of carrier, and RRGs fall outside that definition by design.
Key Takeaways
- Most commercial lease insurance clauses require carriers to be admitted in the state and rated A-:VIII or better by A.M. Best. Risk retention groups typically fail both tests.
- RRGs are chartered under federal law, not state law, which means they aren’t "admitted carriers" in most states where they operate.
- By federal law, every RRG policy must disclose that state insurance guaranty funds are not available. That disclosure is the signal that triggers most COI rejections.
- If you need to resolve this quickly, the fastest option is a supplemental General Liability Insurance policy from a rated, admitted carrier.
Why Landlords Reject Certificates of Insurance from Risk Retention Groups
The rejection almost always comes down to two specific clauses in the lease's insurance section, not the amount of coverage or even the type of coverage.
The Two Lease Clauses That Trigger the Problem
The first is some variation of: "Insurance must be placed with carriers licensed or admitted to do business in [State]." The second is: "Insurer must be rated no less than A-:VIII by A.M. Best's Property-Casualty Key Rating Guide."
Both are standard in institutional commercial leases. Landlords include them because they and their lenders want tenants' insurance backed by a financially stable, state-regulated carrier. They're trying to ensure that the insurance they're relying on will actually be there.
Why RRGs Don't Meet the Admitted Carrier Test
Risk retention groups are chartered under the federal Liability Risk Retention Act of 1986, not state insurance law. An RRG is licensed in its domicile state and operates in other states by registering with those states. But registration isn’t the same as licensure. In states where an RRG isn’t domiciled, it’s generally not considered an admitted carrier.
This distinction matters because admitted status comes with specific protections. Admitted carriers are subject to state rate and form filings, and their policyholders are protected by the state's insurance guaranty fund if the carrier becomes insolvent.
RRGs don't participate in state guaranty funds, and federal law requires every RRG to include a specific notice on all policies: "This policy is issued by your risk retention group. Your risk retention group may not be subject to all of the insurance laws and regulations of your State. State insurance insolvency guaranty funds are not available for your risk retention group."
That notice is designed to be transparent with buyers. But it's also the exact signal that triggers a landlord's attorney to flag the COI.
Why RRGs Often Fail the A.M. Best Requirement Too
Many RRGs don't carry an A.M. Best rating at all. Those that do often fall below the A-:VIII threshold that most institutional leases require.
A.M. Best's "A-" designation means Excellent financial strength. The ":VIII" refers to A.M. Best's Financial Size Category, which corresponds to $100 million to $250 million in adjusted policyholder surplus. Together, they tell a landlord a carrier has been independently reviewed and has the financial depth to back a real claim. Without that rating, the landlord has no independent basis for evaluating the carrier's strength, and most won't accept one.
How to Read the Insurance Clause in Your Lease
Before you do anything else, find the insurance section of your lease and identify exactly what it requires. This determines which options are actually open to you.
The insurance clause is usually in a section titled "Tenant's Insurance," "Insurance Requirements," or "Tenant's Obligations." Depending on the lease form, it often falls around Section 10 through 14. Search for "A.M. Best," "A-rated," "admitted," or "licensed to do business."
Once you find it, look for these specific types of language:
- Admitted or licensed carrier requirement: Phrases like "insurer shall be licensed to do business in [State]" or "insurer shall be admitted in the state where the premises are located" require a state-regulated, admitted carrier.
- A.M. Best rating requirement: Phrases like "rated no less than A-:VIII by A.M. Best" or "rated A:VII or better in the current edition of A.M. Best's Key Rating Guide" are direct financial strength requirements. Read the exact tier specified in your lease. Some set the floor at A:VII, others require A:X.
- Coverage limits: Most commercial leases require General Liability Insurance minimums of $1 million per occurrence and $2 million aggregate. Confirm your coverage hits this before submitting anything.
- Additional insured and waiver of subrogation: These requirements also need to be satisfied by your carrier directly, not just noted on the certificate. An RRG that can meet endorsement requirements but fails the carrier qualification test won't get the COI accepted.
What Are Your Options Right Now?
Your urgency level shapes which path makes the most sense.
Option 1: Get a Supplemental General Liability Insurance Policy from a Rated Carrier
The fastest fix in most cases: keep your RRG policy and add a separate General Liability Insurance policy from a rated, admitted carrier. The new policy satisfies the lease's carrier qualification requirements. Your COI reflects the qualifying carrier, and your landlord's attorney gets what they need.
A few important caveats. First, the two policies need to be coordinated carefully so you're not creating overlapping coverage or unintended gaps.
Second, the supplemental policy needs to show the correct limits, include the landlord as additional insured with their exact legal name, and reflect an active policy period that covers the lease term.
Working with a broker who can structure this correctly saves a lot of back-and-forth.
Option 2: Request a Written Exception from the Landlord
With smaller or independent landlords, you may be able to request a written acknowledgment that your RRG coverage satisfies the insurance requirement. It helps to explain that RRGs are federally chartered liability carriers regulated under the Liability Risk Retention Act of 1986, not fringe or unregulated alternatives.
This approach is worth trying, but it has real limits. Institutional landlords (REITs, large property management companies, Class A office buildings) often can't grant exceptions because their lenders set the carrier requirements. The property manager may genuinely want to help but can't waive a requirement they didn't set.
Option 3: Check with Your RRG
It's worth a call to your RRG to explain the situation. Some RRGs have relationships with admitted carriers or can provide documentation that addresses specific lease language. That said, this is a structural issue, not a paperwork issue. If the carrier isn't admitted in your state or doesn't carry the required A.M. Best rating, no endorsement fixes that.
What Does a COI That Passes a Commercial Lease Look Like?
A certificate of insurance that clears most commercial lease requirements will include the following:
- Carrier name and NAIC number: This appears on the ACORD 25 form, which is the standard certificate of insurance used in commercial transactions. The NAIC number is what the landlord's attorney checks against admitted carrier lists and A.M. Best records.
- Policy limits: $1 million per occurrence and $2 million aggregate for General Liability Insurance is the standard minimum in most commercial leases. Some leases require higher limits or additional umbrella coverage on top.
- Additional insured: The landlord's legal name must appear here, exactly as specified in the lease. A mismatch in the entity name is a common cause of rejection even when the carrier qualifies.
- Certificate holder: Also the landlord, with the same exact legal name.
- Policy period: Current dates that cover the lease term or, at minimum, the near term.
When a policy lists a carrier rated A:VIII by A.M. Best, that rating tells the landlord the insurer received an Excellent financial strength grade and falls into A.M. Best's Size Category VIII, meaning $100 million to $250 million in adjusted policyholder surplus. That combination is the floor most institutional landlords and their lenders treat as acceptable.
How to Avoid a Problem at Your Next Renewal
The cleanest long-term fix is making sure your General Liability Insurance is placed with an admitted, A.M. Best-rated carrier before you sign your next lease or enter your next renewal cycle.
When you're evaluating coverage, ask directly: "Will this carrier satisfy a standard commercial lease's admitted carrier and A.M. Best requirements?" A broker who works with admitted, rated carriers can answer that without hesitation. If the answer requires hedging or research, take note.
If you're signing a new lease, share the insurance clause with your broker before you bind coverage, not after. The carrier qualification requirements matter as much as the coverage limits, and reviewing them upfront takes minutes. Finding out your COI won't work two weeks before move-in takes days to fix.
If you're already facing this problem and need help sorting out the fastest path forward, a Vouch advisor can review your lease language and structure coverage that meets the requirement. We place coverage with rated, admitted carriers, which means COIs like this clear on the first submission.
Getting your certificate of insurance accepted comes down to one thing: coverage placed with the right kind of carrier, not just the right amount of coverage. If you're hitting this friction now, it's worth resolving it for good before your next contract, your next lease, or your next investor review.
Frequently Asked Questions
Can an RRG issue a certificate of insurance?
A risk retention group can and does issue certificates of insurance, and the document looks like any standard COI. The issue isn't the certificate itself. It's whether the underlying carrier satisfies your lease's qualification requirements. Most commercial leases require admitted, A.M. Best-rated carriers. If your RRG doesn't meet those standards, the COI will be rejected regardless of how it's formatted or what limits it shows.
What does "admitted carrier" mean in a lease?
An admitted carrier is an insurance company licensed and approved by a state's insurance department. Admitted carriers are subject to state rate filings and policy form review, and their policyholders are protected by the state's insurance guaranty fund in the event of insolvency.
Can you stay with your RRG and still satisfy a commercial lease?
In some cases, yes. The most common approach is adding a supplemental General Liability Insurance policy from a rated, admitted carrier. Your RRG policy stays in place. You add a separate policy specifically to satisfy the lease's carrier qualification requirements. This works, but it requires careful coordination to avoid coverage gaps or overlaps.
What A.M. Best rating do most commercial leases require?
The most common standard is A-:VIII or better. "A-" means Excellent financial strength; ":VIII" is A.M. Best's financial size category for carriers with $100 million to $250 million in adjusted policyholder surplus. Some leases specify A:VII, others A:X.
What should your certificate of insurance show for a commercial lease?
A certificate of insurance for a commercial lease (typically ACORD 25) should show: the carrier's name and NAIC number, General Liability Insurance limits at or above the lease requirement (usually $1 million per occurrence and $2 million aggregate), the landlord listed as additional insured using their exact legal name, the landlord listed as certificate holder, and an active policy period that covers the lease term.
Vouch Specialty Insurance Services, LLC (CA License #6004944) is a licensed insurance producer in states where it conducts business. A complete list of state licenses is available at vouch.us/legal/licenses. Insurance products are underwritten by various insurance carriers, not by Vouch. This material is for informational purposes only and does not create a binding contract or alter policy terms. Coverage availability, terms, and conditions vary by state and are subject to underwriting review and approval.
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