Risk & Underwriting
Surplus Lines (E&S)
Definition
Surplus lines insurance (also called Excess & Surplus or E&S) refers to coverage placed with non-admitted carriers — insurers not licensed in the state where the risk is located but authorized to write business through surplus lines regulations. E&S carriers are used when the standard (admitted) market is unwilling or unable to provide coverage due to the nature, size, or risk profile of the exposure. Unlike admitted carriers, E&S insurers are not backed by state guaranty funds, and their rates and forms are not subject to prior approval by state insurance departments, giving them greater flexibility in pricing and policy design.
In Zach’s Words
“Sometimes the standard insurance market just won't touch a risk. Maybe the property is in a high-fire zone, maybe the business is too unusual, or maybe there have been too many claims. That's where surplus lines (E&S) carriers come in. These are insurance companies that aren't "admitted" in your state — meaning they're not regulated the same way and they're not backed by the state guaranty fund. But they fill a critical gap: they'll write the policies that nobody else will. The trade-off is that E&S policies are often more expensive and come with fewer regulatory protections. But when no admitted carrier will offer you coverage, E&S is the lifeline. In California especially, with wildfire risk making the standard market tighter and tighter, we're placing more business through E&S carriers than ever.”
— Zach Nadler, CIO