26 JUL 2019

Commentary: Surplus Lines Support Florida’s Vibrant Insurance Market

July 26, 2019

Insurance Journal  – By Michael J. Franzese | July 3, 2019


The Sunshine State is one of the top three consumers of surplus lines insurance in the country. As Florida focuses on attracting jobs and welcoming opportunity, the surplus lines insurance industry is helping the state’s economy grow by supporting risk takers. In addition, the surplus lines market – often dubbed a “safety valve” – covers risks that the standard market won’t, including both business and personal insurance needs.

When it comes to partnering with Florida’s job creators, the surplus lines industry writes almost $2 billion in premiums worth of commercial property coverage annually in Florida, protecting a tremendous amount of brick and mortar businesses, such as retailers, hotels and restaurants. In addition, it writes nearly $2 million of business income insurance, which covers lost profits resulting from damage to properties.

As for homes, condos and apartments, owners and renters alike rely on the surplus lines market to the tune of nearly $800 million per year. It is important to note that most personal lines risks are required to try to find coverage in the standard market first, which means there is a significant block of risk the admitted market either cannot or will not insure. This leaves the surplus lines market as the only choice between insurance and no insurance for many Floridians.

The surplus lines market also covers creative risks, such as animal mortality, protecting against the premature death of an animal; guard service liability; jeweler’s block; marina operator’s legal liability; and prize indemnification, supporting payouts for things like hole-in-one and fishing tournaments.

Unfortunately, there can be misconceptions about surplus lines insurance from lack of understanding and facts. The reality is that if surplus lines insurance was not in Florida, many business and personal risks would go uncovered. Imagine not just fewer fishing and hole-in-one tournaments, but shuttered marinas that cannot get satisfactory coverage to dock the boats used to enjoy Florida’s natural beauty. Closed hotels and theme parks. Fewer innovators. Fewer employers.

It is true that surplus lines insurance is regulated differently than the standard market, but that’s because it serves a markedly different purpose – insuring what the standard market cannot, or will not. It also serves to assist risks the residual market is unable to take, such as homes that Citizens Property Insurance Corp. is unable, by law, to write.

Surplus lines insurers have several sections of Florida law that govern their behavior and regulatory compliance, including perhaps most notably, the same laws applicable to the standard insurance market regarding fair dealing and trade practices.

Surplus lines agents are also independent insurance professionals regulated in the exact same way retail insurance agents are regulated. Moreover, according to data from the Florida Department of Financial Services, the surplus lines market also has a lower volume of complaints than the admitted market.

One thousand surplus lines agents routinely work with retail agents across the state to help unserved or underserved people and businesses looking for coverage. Licensed agents are best suited to match their customers with the most appropriate risk management options, and their credentials can be verified using the resources available at Always consult with a trusted, licensed professional when identifying any insurance options.

It is critically important that the fourth largest state in the country have a vibrant insurance marketplace that meets the needs of the many different facets of our diverse state. This means we should all support policies that ensure a strong admitted insurance marketplace, as well as a competitive surplus lines marketplace to back it up.

That is good for Florida businesses, large and small, as well as the millions of Floridians who support our economy.

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