Excess & Surplus Lines Primer for New Agents


The Excess & Surplus Lines (E&S) market, written by non-admitted carriers, provides specialized and alternative insurance options for hard-to-place risks or unique exposures. Over the years, it has increasingly represented a huge piece of the property and casualty industry.

In fact, most recently, the Wholesale & Specialty Insurance Association (WSIA) released a midyear report from the U.S. Surplus Lines Service and Stamping Office that shows that premium in the E&S market reached nearly $36 billion in the first half of 2023. Commercial Liability and Property coverage comprise the bulk of the E&S market, while some states are seeing increases in personal lines coverages such as Homeowners.

Let’s look into some of the E&S market’s characteristics:

  • While regulated differently from the standard market, E&S carriers must follow specific regulations and oversight by state insurance departments in the United States. These regulations aim to ensure that surplus lines insurers maintain financial stability, comply with reporting requirements, and protect the interests of insureds.
  • E&S insurance is designed to cover risks that are too high or unusual for standard insurance markets. This may include risks associated with certain industries, hard-to-value properties, specialized professional services, or emerging perils.
  • E&S insurance offers more flexibility in terms of underwriting, coverage options, and pricing. Since these policies are not subject to the same regulatory requirements as admitted insurance carriers, surplus lines insurers can often tailor and customize coverage to meet specific needs and negotiate pricing based on the unique risk characteristics of the client.

Surplus lines provide a substantial advantage for firms and individuals looking for customized coverage to meet their specific needs. Customers receive the protection they require more efficiently by leveraging the experience of brokers and agents, which benefits the insurance industry as a whole.