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Unlike most types of insurance, surplus lines insurance can be sold by insurers that are not licensed in the buyers state. However, the surplus lines insurer must have a license in the state where it is based, and the brokers who sell surplus lines insurance must be licensed in their own state.
The surplus lines market is regulated by state insurance regulators. Some state statutes refer to the surplus lines market as the unauthorized or un- licensed market, which can mistakenly give the impression that the market is not regulated.
A policyholder surplus is the assets of a policyholder-owned insurance company (also called a mutual insurance company) minus its liabilities. Policyholder surplus is one indicator of an insurance companys financial health.
For example, if your general liability insurance limit is $1 million and youre sued for $1.5 million, an excess liability policy would cover the $500,000 thats not covered by your underlying general liability insurance.
Excess means more than is necessary, whereas excessive means too much. Surplus means the excess, that of which is more than is necessary. This is typically used in economics. Superfluous also means in excess of what is required or sufficient, just a fancier word.
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Excess and Surplus Linesalso known as ESinsurance is designed for businesses with uniquely high risks that the traditional insurance market will not cover. The types of businesses that may need excess and surplus lines are in industries like construction, building, roofing, and commercial transportation.
Surplus lines insurance is specialized coverage written by unlicensed, nonadmitted insurance companies to cover specific extraordinary items and uncommon or high risks that are generally not covered by traditional insurance companies under standard policies.
A typical insurance policy is usually a primary insurance policy, which covers the financial cost of an insurance claim up to a certain limit. Excess insurance covers specific amounts beyond the limits in the primary policy.

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