COI term

AM Best rating

A carrier's financial-strength grade. The letter is the strength, the Roman numeral is the size, and the certificate does not print either.

Key takeaways

"A- VII" is two requirements, not one. The letter is the Financial Strength Rating; the Roman numeral is the Financial Size Category, a band of the insurer's surplus. A carrier can clear the letter and fail the numeral.
The ACORD 25 does not show the rating. It gives you the insurer's name and its NAIC number, and the requirement in your subcontract is one you verify yourself — for free, in about two minutes.
A good rating does not mean the carrier is admitted in your state. A surplus-lines insurer can be well rated and still sit outside the state guaranty fund, which is the practical difference if it ever fails.
A rating is a snapshot. The one you verified when the sub was onboarded is not necessarily the one in force at renewal, and the certificate will not tell you it moved.

By the Sealinn team · 4 min read · Updated July 2026 · Written for general contractors

One line, two tests

Subcontracts routinely require coverage "placed with insurers rated not less than A- VII by A.M. Best" — the company brands itself AM Best now, though the contracts have not caught up. Read as one requirement it is easy to wave through. It is two, and they measure unrelated things.

The letter is the Financial Strength Rating: AM Best's opinion of the insurer's ability to meet its obligations to policyholders. The scale runs A++ and A+ (superior), A and A− (excellent), B++ and B+ (good), B and B− (fair), C++ and C+ (marginal), C and C− (weak), D (poor), then E for a carrier under regulatory supervision, F for one in liquidation, and S for suspended. So "not less than A−" is asking for the top two bands.

The Roman numeral is something else entirely: the Financial Size Category, a band of the insurer's policyholders' surplus, running from I at the smallest to XV at the largest. It is a measure of how big the carrier is, not how sound. A small, well-run regional insurer can hold an A rating and sit several bands below VII — clearing your letter test and failing your size test. The current surplus range behind each numeral is published by AM Best, and it is worth reading there rather than taking a figure from an article, this one included.

The certificate cannot answer this

Look at the insurers block on the ACORD 25 — the panel top right listing INSURER A, INSURER B and so on, each with a NAIC number beside it. That is everything the form offers about the carrier: a name and an identifier. No rating, no size category, no licensing status. The requirement your own subcontract imposes is one the document you collect to prove compliance is structurally incapable of proving.

Which is fine, because the lookup is free and quick. Take the insurer's name or NAIC number and check two places: AM Best's rating search for the letter and the size category, and the NAIC's Consumer Information Source for whether the carrier is licensed in your state and what its complaint record looks like. Both are linked at the foot of this page. The NAIC number on the certificate exists precisely so that the second lookup is unambiguous when two carriers share a similar name.

Match the NAIC number, not the name

Insurance groups run many carriers with near-identical names, and the entity on the certificate is the one that owes the money — not the parent whose rating is easier to find. The NAIC number is the unambiguous key. If it is missing or unreadable on the certificate, that is a fair question for the agent rather than something to guess at, and it is the same discipline as checking the named insured against the entity you contracted with.

Admitted, non-admitted, and what the rating misses

The rating is about solvency. It says nothing about whether the carrier is admitted — licensed by your state's insurance department and subject to its rate and form review. An admitted carrier's policyholders are backed by the state guaranty fund if it becomes insolvent. A non-admitted, or surplus-lines, carrier's policyholders are not, whatever its rating.

That is a fact to know, not a reason to refuse. Hard-to-place trades — roofing, demolition, scaffolding, anything with height or heat — are routinely written surplus lines because the admitted market will not quote them, and a surplus-lines placement with a strongly rated carrier is an ordinary outcome rather than a warning sign. What you want is to know which one you are holding, so the decision is deliberate. The NAIC lookup tells you the licensing status by state.

How to make the requirement real

Write both halves and mean both. If a size category is in your contract, check it; if you are not going to check it, take it out rather than carry a requirement you ignore.
Verify at onboarding and again at renewal. The rating can move between certificates, and the renewal certificate looks identical either way.
Record what you found and when. "A− VII, checked 4 March" against the sub's file is the difference between having a requirement and having enforced one — the same standard as every other record that survives an audit.
Ask about surplus lines before the job, not after a loss. If the placement is non-admitted, note it; it changes nothing about whether you accept the sub, and everything about what you would be relying on.

Copy-paste to the sub’s agent

Subject: Carrier rating and admitted status — [Project]

Hi [Agent name],

We're the general contractor on [Project]. Our subcontract requires coverage placed with insurers rated not less than [A- VII] by AM Best, and the certificate doesn't show a rating.

Could you confirm, for each carrier on [Sub name]'s certificate:
1) The current AM Best financial strength rating and financial size category, and
2) Whether the carrier is admitted in [state], or whether the placement is surplus lines?

No documents needed — a one-line answer is fine. I just want it on file alongside the certificate.

Thanks,
[Your name], [Your company]

Sealinn does not rate carriers

Sealinn captures the insurer's name from the certificate and stops there. There is no carrier-rating requirement to set, no rating lookup, and no check — a certificate from a carrier rated B− passes exactly as one rated A+ does. The NAIC number is captured too when it is legible on the page, as an extra field rather than a standard one. Verifying the rating is a manual two-minute job, and the two places to do it are cited below.

Where this comes from

AM Best — Best's Credit Ratings — rating scale and Financial Size Categories
National Association of Insurance Commissioners — Consumer Information Source — insurer lookup by name or NAIC number
ACORD — Certificate of Liability Insurance (form 25)

The certificate names the carrier. Checking it is still yours.

Sealinn keeps the certificate, the insurer name and the expiry date together, so the sub's file has somewhere to put what you found.

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