Surplus Lines Insurance

Surplus lines insurance is coverage sold by carriers that are not licensed (admitted) in your state, used for risks the standard insurance market declines to cover. It is a legal, state-regulated parallel market, not a loophole. When no admitted carrier will take a risk at reasonable terms, a surplus lines carrier often will.

Standard carriers file their rates and policy forms with the state and underwrite against published guidelines. Surplus lines carriers can set their own rates and terms, which lets them cover unusual businesses, properties with claim history, high limits, and niche operations. The trade-off: because the carrier is non-admitted, the state’s guaranty fund does not protect the policy if the carrier becomes insolvent, and premiums are usually higher because the risks are harder.

In Georgia, surplus lines placements are regulated by the Office of Insurance and Safety Fire Commissioner. Every surplus lines policy bound in Georgia carries required disclosures at binding: a non-admitted carrier notice, a state surplus lines tax built into the premium, and a broker filing recorded with the Insurance Commissioner. The state also reviews surplus lines carriers for financial stability before they can write Georgia business.

Common surplus lines risks include vacant buildings, contractors with prior claims, bars and event venues, high-value or unusual properties, and businesses needing limits beyond standard market appetite. Coverage often moves back to the standard market at renewal once loss history improves.

Read the full guide to specialty and surplus lines coverage, or request a free coverage review to find out which market your risk belongs in.