What is Surplus Lines?
Surplus lines insurance is coverage for specific risks that the standard or admitted market is either unable or unwilling to cover. While the admitted market is where most consumers find coverage, the surplus lines market is essential to have as a supplement for those consumers and businesses that cannot find coverage otherwise.
Surplus lines carriers are not subject to the same state regulations as licensed insurers in the admitted market, but the companies must meet higher solvency requirements and submit to financial evaluations by the North Carolina Department of Insurance.
To obtain a surplus lines insurance policy, the consumer must work with a broker who is licensed in North Carolina. It is the broker’s responsibility to attempt to find coverage first in the admitted market before seeking coverage in the surplus lines market. Generally, these brokers are producers in the retail industry who work with wholesale brokers to find the appropriate policy.
Examples of Excess and Surplus Lines Insurance
- Wind Coverage for Coastal Exposures
- Earthquake and Flood Insurance
- Home Health Care
- Elderly Adult facilities and Nursing Homes
- Professional Liability
- Construction Risks
- Pollution Liability
- Cyber and Internet Security Liability
- Employment Practices Liability
The Importance of Surplus Lines Insurance
The Excess and Surplus Lines Insurance Market (Non-Admitted Market) provides coverage when the Standard Insurance Market (Admitted Market) is unable or unwilling to provide insurance for hard-to-place risks that would otherwise go unprotected, out of business or never launch. Response to product needs are rapid in the Surplus Lines Market, which is crucial to consumers for immediate developments in their lives and businesses.
Without Excess & Surplus Lines Insurance, consumers are unable to obtain financing, develop new products or provide new services. The economic impact is profound (less jobs, less housing, less business competition, more financial hardship for families). The Surplus Lines Market has been tested and refined to provide an appropriate response to the unique needs of North Carolina Insurance buyers.