Surplus lines
Surplus lines insurance, also called excess and surplus or E&S, is coverage placed with non-admitted carriers: insurers not licensed in the insured's state but permitted to write risks the standard market declines. It exists for hard-to-place business: unusual operations, rough loss history, new ventures, or coverage admitted carriers simply will not offer.
When an account goes E&S
An agency may consider surplus lines when available admitted options do not meet the risk's needs. Access can involve a licensed surplus lines broker, a wholesaler, or an MGA. Confirm the placement process and responsibilities for the specific state and account.
Requirements such as diligent search, documentation, disclosures, taxes, and filings depend on the state and placement. Agree with the surplus lines broker who gathers the information and who completes each required step.
What changes for the client
Two things. First, non-admitted carriers are not backed by the state guaranty fund, so if the carrier fails, there is no state backstop. Second, surplus lines premium taxes and stamping fees get added on top of premium and filed by the surplus lines broker, which is part of why E&S invoices look different.
Read the offered forms and endorsements carefully, including exclusions, minimum earned premium, and cancellation terms. Surplus lines treatment can differ from admitted-market rate and form regulation. Evaluate the actual contract and insurer rather than assuming that the category determines coverage quality.
Read the whole cost and coverage picture
When presenting an E&S option, explain the premium, applicable taxes and fees, relevant disclosures, and material policy terms. Confirm cancellation and minimum earned provisions. The client needs the full placement details to make a useful comparison.
Common questions
Is surplus lines the same as non-admitted?
Close. Non-admitted describes the carrier's licensing status. Surplus lines is the regulated channel for placing business with those carriers through a licensed surplus lines broker.
Does E&S mean lower quality coverage?
No. Many E&S carriers are financially strong and carry solid financial strength ratings. The difference is regulatory, not automatically quality. Check the rating and read the form like you would any market.
Part of the Relay insurance operations glossary. Updated 2026-07-11. See how we source content.
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