Surplus lines insurance is a specialized type of insurance coverage designed to provide protection for risks that are considered, non-standard, too unusual or high-risk for the standard insurance market. It allows businesses and individuals to obtain insurance for unique, complex, or otherwise hard-to-insure situations when traditional insurance carriers decline to provide coverage.
Key Features of Surplus Lines Insurance:
Non-Admitted Carriers: Surplus lines insurance is written by non-admitted insurers. These insurers are not licensed by the state, but are authorized to operate under the surplus coverage regulations. While they do not have to follow state rate and form regulations, they must meet financial solvency standards.
Specialized Coverage: Carriers can cover unique risks that standard insurers may find too risky or outside their expertise. Examples include coverage for high-risk businesses, marine & aviation, entertainment events, or natural disaster-prone properties.
Broker Facilitation: To access surplus lines insurance, consumers typically work with a licensed surplus lines broker. These brokers have expertise in finding appropriate coverage for unusual or complex risks.
Flexible Underwriting: Insurance carriers have more flexibility in designing policies and premiums, making them ideal for customized or niche insurance needs.
No State-Guaranteed Fund Protection: Unlike admitted insurers, surplus lines insurers are not backed by state guarantee funds. If the carrier becomes insolvent, the policyholder may not have recourse through the state.
Examples of Risks Covered by Surplus Lines Insurance:
- High-value or unique properties (e.g., historical buildings)
- New or experimental businesses
- Products liability for niche industries
- Professional liability for specialized professions
- Event cancellation or weather-related risks
- When to Consider Surplus Lines Insurance:
- When traditional insurers decline coverage due to the risk profile.
- If you require a policy tailored to non-standard needs.
- For businesses in industries with higher-than-average risks, such as oil and gas, construction, or entertainment.
Examples of Coverage Needs in Florida:
- High-Value Coastal Homes: Florida’s hurricane exposure makes many properties uninsurable by admitted insurers.
- Marine Insurance: Covering yachts, cargo, or maritime businesses.
- Aviation Insurance: Private aircraft and commercial use. Prop, jet, rotor.
- Hospitality Industry: Hotels, resorts, and event venues with unique liability exposures.
- Construction Projects: Coverage for general contractors or projects with significant risk.
How to Obtain Surplus Lines Insurance in Florida:
To get surplus lines coverage, individuals or businesses must work through a licensed insurance agent or broker such as the Southeast Insurance Group. We are insurance professionals and have the resources and expertise in navigating the markets and connecting clients with insurers that meet their needs. Contact Southeast Insurance to discuss your insurance coverage.
