1. Insurance Terms & Definitions/
  2. Insurance Terms Starting With S

Surplus Lines

What are Surplus Lines?

Surplus lines may refer to insurance policies not offered through the traditional market and categorized as non-admitted insurance. These policies are typically purchased by individuals or businesses who cannot obtain the coverage they need from the conventional insurance market due to specific unusual or high-risk exposures. Typically, these policies are tailored to the insured's needs and unavailable through the traditional insurance market.

Surplus Lines in More Detail

Surplus lines can cover various risks, including professional liability, environmental liability, marine insurance, etc. In most cases, the policy terms are negotiated directly with the insurance company and are not subject to the same regulations as those policies offered through the traditional insurance market.

Surplus lines insurance is subject to state regulations; however, the requirements and laws vary from state to state. To purchase a Surplus Lines policy, the insured must find an insurance broker who is licensed to sell Surplus Lines insurance in the state in which the policyholder resides. The broker will then assist the insured in finding an appropriate coverage policy.

Surplus Lines policies are often more expensive than those offered through the traditional market; however, they can provide coverage for risks that may not be available through a standard insurance policy. Furthermore, the insured can negotiate the policy terms directly with the insurance company, ensuring that the policy meets their needs.