Why is everyone talking about E&S?

What to know now about excess and surplus lines insurance—and what it means for those with hard-to place exposures

There is a chance you’ve recently heard of Excess and Surplus (E&S) lines insurance—an increasingly used option for homeowners across the country. Intended to insure exposures beyond the appetite of the admitted insurance market, E&S coverage could be available for complex or high-risk situations—most often in regions exposed to frequent, severe weather-related events but growing in all parts of the country.

Long a part of the commercial insurance marketplace, E&S is now discussed with more frequency in personal insurance especially with increases in events like wildfires, hurricanes and hailstorms and increasing claim costs due to shorter supply chains, inflation and labor shortages following the pandemic. And while weather can be a determining factor of high-risk exposures, it’s not the only one. Other considerations might be a home whose remote location results in a lack of fire protection, or a home with previous losses, such as a history of broken pipes (and playing into both situations might be a second home that is only occasionally visited).

“These are scenarios that are possible everywhere, which indicates that there is a need for E&S nationwide,” notes Brad Bennette, AVP, E&S Underwriting Manager at Berkley One, a Berkley Company.

E&S can be a solution for established homeowners who seek alternative coverage options or for those looking to purchase a new home when admitted coverage is not available. In the case of someone who has just purchased a home, E&S can be vital.

“Some new home buyers may find it difficult to find admitted insurance coverage when buying that beautiful home on the coast in Florida, for instance,” notes Eileen Opitz, Senior Vice President of Product Management with Berkley One. “The E&S market may be able to offer solutions for those who encounter this scenario.”

There’s flexibility in the E&S market. E&S affords the chance to craft terms tailored to a client’s particular risk characteristics and needs. “With E&S, carriers can create a policy with appropriate terms—ones that might not be available in the admitted marketplace,” says Bennette.

Though agents will always seek out options in the admitted market first—most states require a due diligence effort to place the risk in the admitted market—these solutions can be trickier to obtain with certain homes and locations, especially considering the increasing prevalence of severe weather and logistical and financial complications of the pandemic. It’s all the more reason to have eyes on alternatives like E&S.

Berkley One is a Berkley Company.