About Excess and Surplus Lines Insurance
Excess And Surplus Insurance is that part of the insurance industry that allows the consumer to get an insurance cover of the risk which they want. It gives the consumer the power to purchase property insurance from state regulated insurance market through negotiation. The policyholders, brokers and insurance companies come together to negotiate the cover that the insurance policy will provide and set the price according to the cover.
It allows you to pay according to the cover you need. For example, suppose you are the owner of a firework factory located in low seismic zones, so for your business damage by fire is a more hazardous risk than damage by an earthquake so you should pay for the specific risk which you want that your insurance policy should cover. Therefore you should choose an insurance policy which covers damage by fire and not a policy which covers damage by an earthquake which would save you the premium amount.
Difference between E&S Insurance carrier and standard carrier
The major difference between E&S insurance carrier and standard carrier are:-
• Standard carrier requires a license from the State but E&S carriers are not required to obtain a license from the state for doing business.
• E&S carriers provide you an insurance policy customized according to your need. This is not possible in case of standard carriers. They have a particular policy which cannot be changed.
• E&S carriers are not bound by so many paperwork such as rate and form regulation paperwork which provides them the flexibility to change the coverage and the price demanded it without being restricted by the workload and time needed to do it.
These are the difference between Excess and Surplus Lines Insurance carriers and standard insurance carriers giving them an edge. It should also be noted that E&S carriers can design a policy only when it is rejected by three standard carriers.