Contractual Liability Insurance Policies
Services
Clips
Lexington National provides insurance coverage to service contract providers, obligors, manufacturers, and retailers. Our A.M. Best A- rated paper ensures compliance with state regulations and third party lenders. We work with you to establish a compliant and sustainable program for your business and customers.
Obligor
Lexington National Warranty Services (LNWS), an affiliate of Lexington National, is a licensed obligor across the country. LNWS can be the obligor/provider for your service contract program. We’ll file the necessary terms and conditions for your program and provide the CLIP to provide you a turnkey solution for your new service contract program.
Tools to understand the business
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Who
Lexington National’s CLIPs are designed for service contract providers, obligors, auto dealers, retailers, manufacturers, and warranty administrators.
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Where
Lexington National is licensed to issue CLIPs in every state except Hawaii. LNWS is available to act as an obligor/provider in every state except Florida.
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Why
Most states require that service contracts and extended warranties be insured by a CLIP to provide the consumer an extra level of assurance that the purchased protection service is provided.
Service Contracts
Auto
Lexington National supports all types of service contracts associated with automobiles including VSC, GAP, Tire & Wheel, Etch, Key Replacement and others.
Consumer Goods
Lexington National supports all types of service contracts associated with consumer goods including mechanical breakdown and ADH for consumer electronics, appliances, furniture, jewelry, sporting goods and more.
DESIGNATED CONTRACTS
Lexington National supports and will CLIP designated contracts which cover commercial and other agreements where contractual risk transfer is desired.
Home
Lexington National supports home warranty and related service contracts and is flexible to adapt our CLIP and Obligor services to meet the needs of our customers.
Our Partners
INSURETECH COMPANIES
Lexington National insures and supports some of the most innovative insuretech companies in the industry. Our nimble and flexible approach aligns with the insuretech mission – to serve customers with ease and simplicity.
REINSURANCE
Lexington National structures deals to satisfy each insured’s risk tolerance. We work with captive and standard reinsurers. Trust funds are invested in Treasury Bills or CDs to increase the reinsurer’s return.
Automotive and Consumer Goods Third Party Administrators
Lexington National insures numerous automotive and consumer goods third party administrators. Our focus is to support our partners with the most competitive pricing and highest level of personalized service.
Manufacturers
Lexington National partners with manufacturers to help them ensure customer satisfaction and maximized risk management.
“Lexington National provides a fresh transparent approach to the service contract, warranty and contractual liability industry. As an A- rated insurer we are uniquely positioned to partner with enterprises desiring a different way of doing business. Service and responsiveness are our focus without the potential channel conflict experienced elsewhere.”
Ronald “Ronnie” Frank, President and Chief Executive Officer
Contractual Liability Insurance Policy (CLIP) – FAQs
Who is Lexington National Insurance Corporation?
Lexington National Insurance Corporation is a Florida-domiciled insurance company with administrative headquarters in Maryland. We are licensed to underwrite surety and warranty products, including Contractual Liability Insurance Policies (CLIPs).
What is Lexington National’s financial strength rating?
Lexington National is rated A- (Excellent), Size V by AM Best and is listed by the U.S. Department of the Treasury as an approved surety. This recognition reflects our financial stability, integrity, and proven ability to meet our obligations.
How long has Lexington National been in business?
We’ve been providing specialty insurance solutions for over 30 years. Our leadership team has extensive experience in surety, warranty, and contractual liability products, helping businesses comply with regulatory requirements.
What is a Contractual Liability Insurance Policy (CLIP)?
A CLIP backs the obligations of a service contract provider. It guarantees that valid consumer claims will be paid even if the administrator cannot fulfill its obligations.
What types of CLIPs does Lexington National offer?
We provide (1) Failure to Perform CLIPs (sometimes called Surety or Default CLIPs), and (2) Reimbursement CLIPs (sometimes called First Dollar CLIPs). A Failure to Perform Clip provides direct coverage to the consumer if the Obligor/Provider fails to perform. A Reimbursement CLIP reimburses the Obligor/Provider for all claim payments made to service contract customers.
Can I rent an obligor/provider entity from Lexington National?
Yes. Lexington National Warranty Services, LLC is an affiliate we created exclusively for administrators that work with us. We are happy to “rent” you are obligor/provider while you are getting your own obligor/provider set up.
Can Lexington National act as an administrator?
No. Lexington National does not handle service contract claims, and we do not own an administration company. We do not compete with administrators, dealers or agencies. Our focus is simply to provide a CLIP.
What types of programs does Lexington National insure under a CLIP?
We underwrite CLIPs for automotive, consumer electronics, appliance, and home warranty programs as well as other specialized service contract offerings. Each program is customized to meet your business model and regulatory requirements.
In which states is Lexington National licensed to write CLIP business?
Lexington National is licensed to write CLIP business in every state except Hawaii. We actively maintain compliance with state regulations so our partners can operate confidently across state lines.
Can Lexington National write surplus lines business?
Yes, but in most cases our CLIPs are written on an admitted basis. However, we can consider surplus lines placements with our parent company, Concord Specialty Insurance Company, when needed based on program design or jurisdictional requirements.
What experience does Lexington National have with service contract administrators?
Our employees have decades of experience supporting administrators across various industries. Our underwriting team understands the operational, financial, and compliance requirements that drive successful service contract programs.
What information is required to obtain a CLIP quote?
We typically request: Service contract forms and pricing, historical claims and loss data, financial statements and operational details, and compliance filings.
Does Lexington National have minimum program size requirements?
Program eligibility is evaluated individually. While we often work with established administrators, we also welcome emerging programs that demonstrate sound financial management and strong compliance practices. Minimum annual premiums are sometimes required.
How quickly can Lexington National issue a CLIP policy?
We’ve gone from first meeting to CLIP issuance in as little as weeks. We are a nimble, family-owned carrier, not a huge, multinational insurer. So, we can move quickly.
How are claims handled under a CLIP?
Lexington is not a competitor TPA. Lexington National does not own an administrator and does not handle service contract claims directly. Rather, all service contract claims are handled by the obligor/provider or their designated administrator. Lexington National only gets involved in claim handling if the customer makes a direct claim against Lexington National because it has not received the service promised under the service contract within the permitted time.
Does Lexington National help with regulatory filings?
Each Obligor/Provider and each Administrator are responsible for obtaining all required licensing and form approvals. We frequently provide partners with recommendations on the best firms to assist in those tasks.
Does Lexington National monitor program performance?
We believe in proactive partnership. Lexington National reviews performance metrics, financial data, and compliance status regularly to help ensure program integrity and sustainability.
What types of administrators does Lexington National partner with?
We partner with reputable service contract administrators who share our commitment to underwriting, transparency, and regulatory compliance. Long-term collaborative relationships are the foundation of our approach.
How can I partner with Lexington National?
If you’re a service contract administrator seeking a CLIP carrier, we’d be glad to talk.
Email: tom@lnic.com
Phone: 214-906-0908