As the insurance industry changes, so too does the need to address and identify areas of opportunity – insurance products that many people need, but that they may not know they need or may not yet have. That is often the case with Excess and Surplus Insurance, which includes products that are becoming increasingly important to offer in the state of California.
NOTE: If you haven’t yet, be sure to listen to our podcast episode with Mike D’Arelli, the Executive Director of the American Agents Alliance, where we talk at length about E&S Insurance.
What is E&S Insurance?
E&S insurance, also known as “surplus lines insurance,” is a unique insurance proxuct designed to cover risks that are too unusual or high-risk for standard insurance carriers to insure.
This type of insurance is most commonly sought when the applicant has a higher risk than what is acceptable in the regular market, or when the desired insurance coverage does not conform to the norms of standard insurance policies.
For example. E&S insurance may cover:
- Wildfire Risk
- Flood/Earthquake Zones
- Medical Malpractice
- Cyber Liability
- Special Events Insurance, and More
E&S insurance operates outside the regulations that typically govern standard insurance markets, allowing more flexibility in terms of policy terms and risk assessment. Typically, E&S insurers have the expertise to evaluate unique and high-risk scenarios and determine appropriate premiums and coverage limits.
Unlike standard insurance policies that often have rigid criteria and limitations, E&S policies can be customized to fit the specific needs of the insured, providing broader coverage options.
While E&S insurance does not conform to the same state regulations as standard insurance, it is still regulated under different guidelines to ensure financial solvency and ethical practices. It is important to note that E&S insurers must be licensed or approved to write surplus lines in the state where the insured risk is located.
E&S Insurance fulfills a valuable role in the insurance landscape, insuring risks that are otherwise uninsurable in standard markets. It helps with high risk entities, unique exposures, and for those in new or emerging markets that likely would otherwise qualify for insurance, but lack historical data.
What Licenses Do You Need to Hold to Sell E&S Insurance?
In the state of California, there is no separate exam that one needs to take in order to sell E&S insurance, but it is a separate license. A person must hold a Property and Casualty license in good standing, and meet specific experience requirements (2 years of experience within the five years before applying for the license). They can then apply online using this link. You will need to specify whether you plan to offer business entity surplus lines or individual surplus lines, and once you receive approval you can begin selling E&S insurance.
Ready to obtain your Property and Casualty (P&C) insurance license? Start your classes today here at LyteSpeed Learning.