What is a Surplus Lines Broker (SBL)?

Question

What is a Surplus Lines Broker (SBL)?

Answer 1

The surplus lines broker is able to secure specialty coverage that is not available through "mainstream" insurance carriers. Below is a typical description of a surplus lines broker as defined by State insurance laws.



An individual, corporation, partnership or other business entity required to be licensed under the laws of a state to procure certain insurance coverages, called surplus lines, that cannot be procured from authorized insurers.

If certain insurance coverage cannot be procured on terms acceptable to the insureds from authorized insurers, such coverages, designated "surplus lines", may be procured from unauthorized insurers.

The insurance must be procured through a licensed surplus line broker.

The full amount of insurance required must not be procurable, after diligent effort, from among the insurers authorized to transact that kind and class of insurance.

The insurance must not be procured for the purpose of securing the advantage of a lower premium rate than would be accepted by authorized insurers.

Within 30 days of the effective date of the insurance policy, the surplus line broker shall file a written report validating that coverage was written through the unauthorized market.