Surplus Lines Insurance
The non admitted market placing coverage with insurers not licensed in the state when admitted carriers decline.
Overview
Risks that go surplus lines include tough classes such as nightclubs, demolition contractors, and cannabis operations, unusual limits or forms, and capacity beyond standard markets. Policies escape state rate and form filing rules, so terms are negotiable and prices unregulated, but state guaranty funds do not protect policyholders if the surplus lines insurer fails, which is why solvency vetting matters. Brokers must document diligent search and decline attempts under state rules and remit surplus lines premium taxes. Lloyd's syndicates are the best known writers in the US market, which has grown into the hundreds of billions in premium, countercyclical to the standard market cycle.
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