What Is Excess And Surplus Lines Insurance?

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What Are Excess And Surplus Lines Insurance Policies?

What Is Excess And Surplus Lines Insurance?

What Is Excess And Surplus Lines Insurance. Also knows as The E&S, and the features of this type of insurance can differ significantly from standard insurance. This article is an overview of the aspects of excess and surplus lines insurance that business owners need to know.

In the most basic form, excess and surplus lines insurance is a unique type of insurance coverage that serves consumers who are unable to obtain coverage in the standard or admitted market. Standard insurance companies will usually not write insurance policies for unusual and high-risk situations. Excess and surplus lines insurance enable consumers to obtain casualty or property insurance cover via an insurance market that is regulated by the respective state.

What is excess and surplus lines insurance? Insurance companies, brokers, agents as well as policyholders can formulate unique insurance coverage and work out premiums on the basis of the risks involved. As such, the surplus lines insurance industry has a unique ability to effectively adapt to changing market conditions as well as consumer and commercial firm preferences. This segment of insurance is unlike standard insurance for the usual risks that employs pre-approved policies and pre-approved rates.

What is excess and surplus lines insurance? The E&S insurance sector offers commercial policies that cater to unique, complex or difficult risks that cannot be easily insured in the standard insurance market.

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What Is Excess And Surplus Lines Insurance?

Excess and surplus lines insurance, also known as E&S, is a type of insurance that provides coverage for risks that are not typically covered by traditional insurance companies. This type of insurance is designed to provide coverage for high-risk, complex, or unusual risks that cannot be covered by standard insurance policies.

Excess and surplus lines insurance is regulated by state insurance departments, but it is not subject to the same regulations as traditional insurance. This means that it can be sold by licensed insurance brokers who are authorized to sell these types of policies.

Excess and surplus lines insurance is typically used to cover risks that are too high or too complex for traditional insurance policies. For example, if a business operates in a high-risk industry such as oil and gas exploration, it may need to purchase excess and surplus lines insurance to cover its operations.

One of the key features of excess and surplus lines insurance is that it is often customized to meet the unique needs of the insured. This means that policies can be tailored to cover specific risks that are not covered by traditional insurance policies.

Excess and surplus lines insurance can be written by both domestic and foreign insurers. Foreign insurers are often used to provide coverage for risks that are not covered by domestic insurers. This is because foreign insurers are often more familiar with the risks and can provide coverage at a lower cost.

In conclusion, excess and surplus lines insurance is a specialized type of insurance that provides coverage for risks that are not typically covered by traditional insurance policies. It is regulated by state insurance departments but is not subject to the same regulations as traditional insurance. While it is more expensive than traditional insurance policies, excess and surplus lines insurance is an important tool for businesses and individuals who need coverage for high-risk or complex risks.

How Is The Excess And Surplus Lines Market Regulated?

Every surplus lines insurer is licensed and regulated in their home state. They submit to the jurisdiction of the policyholder's home state either directly or indirectly. All states maintain a list of the approved E&S lines carriers. Insurance policies can only be formulated by the companies in the approved lists.

The surplus lines brokers are also licensed and regulated in the policyholder's home state. The brokers are task with ascertaining the solvency of the E&S lines carrier, complying with surplus lines tax regulations and providing specific statutory notices.

What is excess and surplus lines insurance? This market is a viable component of the larger insurance industry and has been for many years. It meets the insurance needs of lenders and businesses across the country and can provide a much-needed risk management solution to your business.

What Benefits Does Excess & Surplus Insurance Offer?

The E&S lines market, therefore, allows both the lender and borrower to obtain coverage not otherwise available on the standard market for various reasons. These can include:

  • Risks not meeting the requirements of the standard insurance market as a result of location, age, and loss or cancellation history.
  • Policy limits exceeding the guidelines for the admitted market.
  • Risk being out of range of policies that standard carriers are willing to write, otherwise referred to as an unusual risk.
  • The risk being too great or having high loss potential such that standard carriers are not comfortable offering cover for such a risk. These are termed as extraordinary risks.

The Difference Between Standard And Excess & Surplus Carriers

How Does A Standard Or Admitted Insurer Differ From Excess & Surplus Carrier?

A standard or admitted lines carrier refers to an insurance coverage provider that is licensed by the department of insurance from the respective state. Through licensure, they have the authority to write certain lines of insurance. Standard lines carriers adhere to strict regulations and are constrained by form and rate regulations. This serves to protect you as the consumers/policyholder from any illegal or unethical business practices, such as fraud.

Standard lines carriers are also obligated to contribute a specific amount to a state guarantee fund. A state guarantee fund is basically a government coffer that can be used to cover for losses in the event that an insurance firm becomes insolvent. This is also the case when a standard carrier is unable to accrue losses owed to the policyholders.

Where Can I Buy Excess And Surplus Insurance?

These excess & surplus wholesalers insure the risks that would otherwise be declined by standard carriers. Your broker can help you get a policy from these companies. Some of the well known are:

  • Abram Interstate Insurance Services
  • Adriatic Insurance Company
  • All Risks, Ltd.
  • AmWINS Group, Inc.
  • Arc Excess & Surplus
  • Arlington/Roe & Co.
  • Arlington/Roe Aviation
  • Ascinsure Specialty Risk
  • Bankers Insurance Service
  • Bass Underwriters
  • Bolton & Co.
  • Brown & Brown Insurance
  • Brown & Riding Insurance Services
  • Brownyard Group
  • Burns & Wilcox
  • CED 1976, LLC
  • CITA Insurance Services
  • CRC Insurance Services / Swett & Crawford
  • CTC Transportation Insurance Services, LLC
  • Coastal Insurance Underwriters, Inc.
  • Cochrane & Company
  • Commercial Sector Insurance Brokers
  • Community Associates Insurance Solutions, LLC
  • Cosmetic Insurance Services, a division of Epic Ins Brokers & Consultants
  • Costanza Insurance Agency, Inc.
  • Couch Braunsdorf Insurance Group
  • Creative Underwriters Corp.
  • Custom Assurance Placements, Ltd.
  • Daigle & Associates, Inc.
  • Empire Underwriters, LLC
  • Finkelmeier Insurance Agency, Inc.
  • Foremost Insurance Group
  • Founders Specialty
  • Freberg Environmental Insurance
  • Fredricksen Insurance Services
  • Gateway Specialty Insurance
  • Global Special Risks, LLC
  • Gorst & Compass Insurance
  • Gray-Stone & Company
  • Greene & Associates, Inc.
  • Grundy Insurance - Water, Irrigation & Sewer
  • Herbert H. Landy Insurance Agency
  • IT Risk Managers, Inc.
  • Irwin Siegel Agency
  • Izzo Insurance Services, a Division of Hull & Company LLC
  • J.C. Taylor Antique Auto Insurance
  • James River Insurance Company
  • Jewelers unBLOCKed
  • Jimcor Agencies
  • Joseph Chiarello & Co., Inc.
  • K&K Insurance Group, Inc.
  • Lawyer's Protector Plan
  • LawyerGuard
  • Lee and Mason Financial Services, Inc.
  • LifeScienceRisk
  • MagMutual Insurance Company
  • Marine Underwriters Agency, Inc.
  • Markel Specialty
  • Marnitz & Associates Insurance, Inc.
  • Mcclelland And Hine
  • Medmarc Insurance Group
  • MexiPass International Insurance Services, LLC
  • Midlands Management Corporation
  • Mile High Markets - a Division of Hull & Company, Inc.
  • MiniCo Insurance Agency, LLC
  • Myron F. Steves & Co.
  • NIF Group
  • Nason Associates, Inc.
  • National Marine Underwriters, Inc.
  • NationsBuilders Insurance Services (NBIS)
  • Natural Catastrophe Insurance Program from Poulton Associates
  • New Empire Group
  • PERse (Power Energy Risk)
  • Paige-Ruane, Inc.
  • Pak Programs
  • Partners Specialty Group
  • Peachtree Special Risk Brokers
  • Philadelphia Insurance Companies
  • Professional Governmental Underwriters, Inc.
  • Professional Program Insurance Brokerage
  • Program Brokerage Corporation
  • Quaker Special Risk
  • R. E. Chaix & Associates Insurance Brokers, Inc.
  • RT Specialty
  • Risk Placement Services, Inc.
  • Risk Theory Insurance Services
  • Roush Insurance Services, Inc.
  • SASSI (Salon & Spa Specialty Insurance Agency)
  • Sapphire Blue
  • Scottish American Insurance General Agency
  • Socius Insurance Services
  • SolePro
  • Southern Insurance Underwriters, Inc.
  • Special Markets Insurance Consultants, Inc.
  • Sunset Aviation Insurance Services, Inc.
  • Surety Bond Professionals, Inc.
  • Tapco Underwriters, Inc.
  • The Mechanic Group, Inc.
  • Thum Insurance Agency, LLC
  • U.S. Risk Insurance Group, Inc.
  • USG Insurance Services
  • United Educators
  • Universal Service Agency, Inc.
  • Venture Insurance Programs
  • Vindati
  • World Wide Specialty Programs
  • Worldwide Facilities, LLC

How Much Does Excess and Surplus Insurance Cost?

Typically more than standard insurance. Because of the variance in they underlying insurance forms and coverages, you will need to speak to a broker to get an exact price for your business.

Consult with a commercial insurance agent to determine which coverage types you need and any endorsements that you must purchase to fully protect your business' potential liability at the lowest possible premium.

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