Without access to the Surplus Lines Market, what alternatives do insureds have?

Individuals and businesses seeking coverage outside of the Surplus Lines Market have a few alternatives available to them. Self-insurance and captives represent viable options that enable insureds to manage their own risk. Self-insurance allows an entity to set aside a pool of funds to cover potential losses instead of purchasing an insurance policy from an insurer. This can be a practical option for larger companies that can afford the risk and have the cash flow to support it.

Captives, on the other hand, are insurance companies created by a parent organization to provide coverage for itself. This approach provides more customization in terms of coverage while also helping to control insurance costs over time.

In contrast, relying solely on standard insurance and brokers might limit options, as these providers may not cover high-risk specialties that surplus lines insurers typically address. The concept of only admitted coverages also suggests a restricted marketplace, as admitted insurers are those licensed to operate within the state and may not offer the same range of coverage as surplus lines. Lastly, claiming that there are no insurance options is overly simplistic since various avenues for coverage do indeed exist, albeit with different structures and considerations. Therefore, self-insurance and captives are strong alternatives for those who cannot access the Surplus Lines Market.