Surplus Lines Professional Liability policies for Design Professionals

surplus linesSurplus lines Professional Liability policies for Design Professionals. What do surplus lines mean?  In every State in the United States there are non-admitted insurers (surplus lines) and licensed (admitted) insurers. Non-admitted insurance carrier is not required by the States to get approval for the policy forms used or the premium charged.  Also, the surplus lines carriers are not backed by the State Guaranty Funds.  Admitted insurance carriers are required to file both policies and premiums and are backed by the State Guaranty Fund if they were to become insolvent.

Additionally, surplus lines carriers tend to have more exclusions to their policies than an admitted carrier does.  Surplus lines carriers, since they are not monitored by the States, can non-renew a policy without notice.  So make sure you understand your surplus lines policy before signing up with the carrier.

Why would my Design Professional firm need Surplus Lines?  Surplus lines carriers will look at what is considered higher risk firms.  For example, firms that are providing services that are not desirable to the admitted carriers, i.e. geotechnical services.  Or if the firm has a high claims activity the non-admitted carriers are more willing to look at quoting on a renewal.

Each State has different requirements as far as a tax that is charged to the policy.  For example, Arizona is 3% tax, Colorado is a 3% tax and Michigan is 2.5% tax.  The tax is required since the surplus lines carriers are not regulated by the States as the admitted carriers are regulated.

Your PUI agent is here to help with your questions about Surplus Lines, please feel free to call or email.

Previous Post
Data Breaches on the Rise
Next Post
Workplace injuries can hurt!