For insurance agents, one of the most important decisions you can make is selecting the right coverage for commercial property clients. One type of coverage that you may need to consider for some clients is surplus lines insurance. This type of coverage is designed to provide solutions when traditional insurance options are not available or adequate. But when do you need to get surplus lines insurance for commercial property? In this post, we'll take a closer look at surplus lines insurance and when it may be the best option for your clients.
1. What is Surplus Lines Insurance?
Surplus lines insurance refers to coverage that is provided by companies that are not licensed in the state where the property owner is located. While these companies are not licensed by the state, they are able to provide coverage that is not otherwise available from licensed insurance providers. Surplus lines insurance is often used to address unique or specialty risks that traditional insurers don't cover.
2. When is Surplus Lines Insurance Needed?
Surplus lines insurance is typically used when a commercial property owner has unique risk factors. This could include properties that have a history of insurance claims, properties that are located in high-risk areas, or properties that have unique features that traditional insurers don't cover. In general, if you have a client with property that is difficult to insure through traditional channels, it is worth exploring the option of surplus lines insurance.
3. How to Obtain Surplus Lines Insurance
Obtaining surplus lines insurance requires working with a licensed surplus lines or wholesaler broker or agent. This individual will be able to connect you with non-admitted insurers who can provide coverage for your clients. It's important to work with a reputable broker to ensure that you are getting coverage from a reputable insurer. Additionally, it's essential to research the insurer's financial stability to ensure that they can cover claims in the event of an incident.
4. Additional Considerations for Surplus Lines Insurance
When considering surplus lines insurance, it's important to keep in mind that it typically comes with higher premiums. This is due to the fact that these policies are designed to provide coverage for risks that are not otherwise insurable. Additionally, it's important to keep in mind that surplus lines insurance is not subject to the same regulations as traditional insurance policies, which means that coverage may differ from state to state.
As an insurance agent, it's your job to provide your clients with the best possible coverage options. In some cases, that may mean exploring the option of surplus lines insurance for commercial property. By understanding what this type of coverage is, when it's needed, and how to obtain it, you can better serve your clients and make sure they have the protection they need. Remember to work with a reputable broker and do your due diligence in researching insurers to ensure that you are getting the best possible coverage for your client's needs.
Surplus lines insurance is a valuable coverage option for commercial property owners who have unique or specialty risks that are not otherwise insurable through traditional channels. By working with a reputable broker and exploring non-admitted insurers, you can help your clients obtain the coverage they need to protect their property. Keep in mind that surplus lines insurance is subject to different regulations and often comes with higher premiums, so it's important to do your due diligence when selecting the right coverage for your clients. With the right information and resources, you can help your clients make informed decisions about their coverage options.