E&S Insurance Helps Fill the Gaps
Most businesses can find insurance through the standard market. But some risks are unusual, specialized, higher-risk or simply don’t fit the underwriting guidelines of traditional insurance companies.
That’s where Excess & Surplus Lines insurance may come into the conversation. E&S coverage is designed for certain risks that may be difficult to place through standard Texas-licensed insurers.
At Lavon Insurance, we can help evaluate your situation and explore whether standard or specialty insurance markets may be appropriate for your business.
What Is E&S Insurance?
E&S stands for Excess & Surplus Lines. Surplus lines insurance is a specialized part of the property and casualty insurance market that can provide coverage for certain risks that standard insurers may be unable or unwilling to insure.
Unique Risks
Some businesses have operations, properties or exposures that fall outside standard underwriting guidelines.
Hard-to-Place Coverage
E&S markets can provide options when suitable coverage cannot be found through the standard insurance market.
Specialized Underwriting
Specialty insurers may evaluate risks individually rather than relying only on standard-market underwriting guidelines.
Who Might Need E&S Insurance?
E&S insurance isn’t automatically better or more appropriate than standard insurance. It is generally considered when a particular risk is difficult to place in the standard market.
Specialty Contractors
Contractors with unusual operations, specialized equipment or unique exposures may require specialty insurance solutions.
Unique Commercial Properties
Certain properties may have characteristics that make standard property insurance difficult to obtain.
Specialized Businesses
Businesses with uncommon products, services or operations may need underwriting outside the standard market.
Higher-Risk Operations
Certain operations can present exposures that traditional insurers may be unwilling to accept.
Special Events
Certain events or unusual liability exposures may require specialty insurance markets.
Businesses With Unusual Exposures
If your business doesn’t fit conventional underwriting guidelines, an E&S market may be worth exploring.
Standard Insurance vs. E&S Insurance
The primary difference isn’t simply the type of business being insured. It also involves how the insurer operates within the Texas insurance market and the regulatory protections that apply.
Important Things to Know About E&S Insurance in Texas
E&S insurance operates differently from insurance provided by Texas-licensed insurers. The Texas Department of Insurance does not license surplus lines companies, although eligible surplus lines insurers must meet Texas requirements and be approved to conduct surplus lines business in the state.
Texas also requires an agent to make a diligent effort to find coverage through a Texas-licensed insurer before placing insurance with an eligible surplus lines insurer, subject to applicable exceptions.
Surplus lines policies also do not have all of the same consumer protections that apply to policies issued by Texas-licensed insurers. For example, surplus lines insurers are not members of the Texas Property and Casualty Insurance Guaranty Association.
That’s why choosing the right market and understanding the policy terms is especially important when considering E&S insurance.
What Types of E&S Coverage Are Available?
E&S isn’t one specific policy. Specialty markets may offer different types of commercial insurance depending on the risk and the insurer.
Property Insurance
Specialty commercial property coverage may be available for buildings, locations or property exposures that are difficult to place in the standard market.
Liability Insurance
Certain unusual or specialized liability risks may require a specialty underwriting approach.
Specialty Commercial Coverage
Specialty markets can offer solutions for specific commercial risks that don’t fit conventional insurance programs.
Hard-to-Place Risks
When standard markets aren’t an option, an E&S market may provide an alternative worth evaluating.
A Simple Example
What If Your Business Doesn’t Fit the Box?
Imagine a Texas business with a specialized operation, unusual property characteristics or a unique liability exposure. Several standard insurers may decline the risk because it doesn’t fit their underwriting guidelines.
That doesn’t necessarily mean the business is uninsurable. It may mean the risk needs to be evaluated by a specialty market.
The goal isn’t simply “E&S.”
The goal is finding an insurance solution that fits the actual risk, whether that ultimately means a standard market, a specialty market, or a combination of coverages.
Coverage should always be evaluated based on the specific business and policy terms.
Why Work With Lavon Insurance?
E&S insurance can involve more specialized underwriting and policy terms. Having an agent who takes time to understand your business can make the process easier to navigate.
We Start With Your Risk
We take time to understand your business, operations, property and insurance needs before looking at coverage options.
Multiple Insurance Markets
An independent agency can evaluate insurance options from multiple markets rather than representing only one insurance company.
Personal Service
You get a person who can help explain the differences between standard and specialty insurance options.
Related Commercial Insurance
E&S insurance may be only one part of a broader commercial insurance program. Depending on your business, other coverage may also be appropriate.
General Liability
Coverage for certain third-party bodily injury, property damage and related liability exposures.
Business Owner’s Policy
A packaged insurance solution that can combine several important business coverages.
Professional Liability
Coverage for certain claims arising from professional services, errors or omissions.
Cyber Insurance
Coverage options for certain cyber, data privacy and network-related exposures.
E&S Insurance FAQs
What does E&S insurance stand for?
E&S stands for Excess & Surplus Lines. Surplus lines insurance is designed for certain risks that may not be available through the standard insurance market.
Why would a business need surplus lines insurance?
A business may consider E&S insurance when its risk is unusual, specialized or otherwise difficult to place with a standard insurer.
Is E&S insurance the same as regular business insurance?
No. E&S insurance operates differently from coverage provided by Texas-licensed insurers, including differences in regulation and policyholder protections.
Are E&S insurance companies licensed in Texas?
Surplus lines companies are not licensed by the Texas Department of Insurance in the same manner as admitted insurers. Eligible surplus lines insurers must meet applicable requirements and be approved to conduct surplus lines business in Texas.
Does E&S insurance have the same protections as standard insurance?
No. Surplus lines insurance has fewer consumer protections than insurance from Texas-licensed insurers, and surplus lines insurers are not members of the Texas Property and Casualty Insurance Guaranty Association.
Can Lavon Insurance help me find E&S coverage?
We can review your business and insurance needs and determine whether standard or specialty insurance markets may be appropriate for your risk.
Have a Risk That Doesn’t Fit the Standard Market?
Let’s take a look at your business, understand the exposure and explore insurance options that may fit your situation.
Important: Insurance coverage varies by policy and insurer. E&S and surplus lines policies may have different terms, conditions, exclusions, limits and consumer protections than policies issued by Texas-licensed insurers. Coverage is subject to the actual policy language. This page is for general informational purposes and does not constitute a guarantee of coverage or a recommendation that a particular insurance product is appropriate for any individual business.