Excess & Surplus Lines Insurance

Surplus lines carriers write coverage for hard to place risks usually not written by standard markets.  Risks typically written as surplus lines include aviation, pharmaceutical Product Liability, Ocean Marine, and Excess Flood.  These risks share certain underwriting factors:

• Complexity of the account (i.e. - oil refineries, multi-state contractors)
• Distressed (i.e. - high incidence of fire losses, high loss ratio for commercial auto)
• Unique (i.e. - special events, wildlife parks, contractual liability issues)
• Capacity (i.e. –  large construction projects, very high limits of liability required)

Standard Markets

Insurance companies licensed specifically in a particular state are known as “admitted carriers” or the “standard markets”.  These carriers are highly regulated with their policy forms and rates requiring approval by state insurance departments.  Regulators closely monitor their financial condition and market conduct.  Regulators collect a small percent of written premiums to finance each state’s “guaranty fund” which provide a policyholders’ safety net when an “admitted” carrier enters receivership or files bankruptcy.  In the standard markets segment, the insurance agent’s customer is the policyholder, and the insurance agent (or agency) is typically appointed by contract to represent a carrier.

Excess and Surplus Lines Insurance

In contrast, “Excess & Surplus” lines insurance companies are known as “non-admitted carriers” or “non-standard markets” (state regulators also use the surplus lines terms “eligible”,  “unlicensed”, and “alien” insurers).  State insurance departments generally maintain a list of “approved” surplus carriers based to a great extent on each carrier’s financial condition.  However, surplus lines carriers can be far more flexible due to minimal regulation of policy forms and rates.  While premium taxes are collected, there is no guaranty fund protection for policyholders.  Because the retail insurance agent placing coverage is considered the customer of a (wholesale) surplus lines agent, there is little or no direct contact between a surplus lines agent and the policyholder.  Surplus lines agents write policies through direct carrier appointments, as managing general agents for a carrier and/or submit accounts to carriers on a one-shot brokerage basis with no contract.

Our Experience with Surplus Lines Insurance

Mr. Daniel’s expertise was developed from thirty-plus years dealing with Surplus Lines insurance.  His experience includes extensive interface with wholesale surplus lines agents, managing general agents, and the nuances of structuring coverage using non-standard policy forms. 

We welcome a call to discuss your specific case issues: 817.980.4897.

Excess & Surplus Lines Insurance Expert Witness Cases

Cases are listed only after we are disclosed as an Insurance Expert to opposing counsel.

December 2011  - Designated as a Property Insurance Expert by policyholder counsel to evaluate claims handling custom & practice.  The litigation resulted from Hurricane Rita windstorm damage to a hotel and subsequent claim investigation by carrier.   Engagement included review of Insurance Bad Faith issues on the part of a Surplus Lines carrier.  Cause No. 12,426; S.A. Hospitality v. Certain Underwriters at Lloyd's, In  the 1st Judicial District Court, Sabine County, Texas.  Attorney Chris Leavitt, The Buzbee Law Firm, (713) 223-5393.

April 2011 – Retained by policyholder counsel as their Property Insurance Expert to examine Agents Errors & Omissions and Insurance Bad Faith issues.   Assignment required expertise with coinsurance penalties applied to claims under a Surplus Lines policy written on a Functional Replacement Cost basis and allegations of failure to disclose material facts.  Oklahoma & Texas Panhandle Compress v. Aycock & Fowler Insurance Agency; Cause No. 2010-552,281; In The 72nd Judicial District, Lubbock County, Texas. Attorney Brad Parker, Parker McDonald, P.C., (817) 503-9200.

August 2010 - Engaged by contractor's attorney to analyze contractual liability claim denial under Products Liability Insurance.  Case involves Agents Errors & Omissions, Surplus Lines, Commercial General Liability, and aspects of Insurance Bad Faith resulting from questionable Certificates of Insurance.  Cause No. 2009-65915; High Tech Plumbing v. Colony Insurance Company, et al. In the 127th Judicial District Court of Harris County, Texas.  Attorney Kelly Prather, Greenwood Prather Law Firm, (713) 333-3200.

May 2010 - Retained by counsel for policyholder seeking coverage under a 1973 ISO. Comprehensive General Liability form.  Expert  affidavit addressed issues involving  Commercial General Liability and Products Liability Insurance coverage under Surplus Lines policies.  Case also involved Pollution Liability coverage and Reliance Insurance Company liquidation proceedings (No. 269 MD 2001 In The Commonwealth Court of Pennsylvania).  Reliance Insurance Co. v. Raybestos Products, United States District Court, Southern District of Indiana, Indianapolis Division, Cause No. IP 97-0027-C-Y/G.  Attorney Brett Nelson, Plews Shadley Racher & Braun LLP, (317) 637-0700.

December 2008 - Designated by plaintiff counsel as their Property Insurance Expert regarding a total loss due to Hurricane Wilma.  Provided analysis pertaining to Agent Error & Omission.  Case issues involved Florida Windstorm insurance, Business Income and Surplus Lines Insurance placement.  Scott Katz & Beth Berry, Butler Pappas Attorneys , (813) 281-1900.    TCB Farms v. Oswald Trippe, et al; Case No. 07-1389-CA, Twentieth Judicial Circuit Court, Collier County, FL.

August 2008 –Designated by plaintiff counsel as a Flood Insurance and Property Insurance Expert.  Flood claim was denied after Tropical Storm Allison flooded a large apartment complex in Houston, TX. Provided coverage analysis for Agent Error & Omission, Business Income and Surplus Lines Insurance coverage issues.  Meg Las Villas v. United States Fire; Cause No. 2007-54444, Harris County, TX.  Attorney Paul Allred, (214) 528-9560, Sullivan & Holston.

April 2007 - Selected by defense counsel as their Property Insurance Expert to provide analysis and testimony regarding and Insurance Bad Faith. Case required expertise in Business Income, Flood Insurance, Surplus Lines & Ocean Marine Insurance. Litigation resulted after damage due to Hurricanes Jeanne and Francis and subsequent claim denials. Attorneys Larry Montgomery & Lee Chase, Glankler Brown, PLLC ( 901) 525-1322 . Dyer Investment Company, LLC, et al v. Marsh & McLennan Companies, Inc. et al, and Certain Underwriters at Lloyd's, Case No. 05CV2812-D/P in the United States District Court for the Western District of Tennessee Western Division.

November 2006 - Retained by plaintiff as consulting Property Insurance Expert to analyze issues surrounding claim denial under an Inland Marine Builders Risk policy. Case issues included Additional Insured endorsements, policy exclusions, Agent Errors & Omissions, and carrier Bad Faith. Attorney Michael Kennedy - Casey Ciklin Lubitz Martens & O’Connell West Palm Beach, FL (561) 832-5900. Suffolk Construction v. Royal Indemnity Co., Brown & Brown, Inc., et al; Cause No. 502002CA012543, 15th Judicial District, Palm Beach County, Florida.

September 2006 - Retained by defendant to offer opinions regarding premium basis used for a disputed Commercial General Liability audit. Attorneys Matt Nowak and Brandon Starling – Nowak & Stauch, LLP Dallas, TX (214) 823-2006. Everest Indemnity Insurance Company v. Ranger Fire, Inc.; Cause #01721104805 17th District Court, Tarrant County, TX

August 2006 - Engaged by defense counsel to analyze claims issues relative to coverage for Boiler & Machinery losses under a Lloyds Ocean Marine Builders Risk policy. Attorney Clif Hall - Westmoreland Hall, PC (713) 871-9000. Smith-Enron et al v. Underwriters at Lloyds, et al; Cause No. A-175389, Jefferson County Texas 58th Judicial District.

May 2006 - Engaged by counsel for plaintiff to assist with Agent Errors & Omissions and Homeowners claims issues in regard to Excess Flood Insurance. Attorney Peter Koeppel - Best Koeppel Attorneys (504) 598-1000. Best v. Independent Insurance Associates, Inc., Civil District Court for the Parish of Orleans, State of Louisiana; No. 05-13441, Division “H”, Docket No. 12.; Best v. Independent Insurance Associates, Inc. and Employers Reinsurance Corporation; United States District Court, Eastern District of Louisiana; No. 06-1130, Section “C”, Magistrate 5.

February 2006 - Retained by defense counsel for insurance carrier. Case involved Agent Errors & Omissions as to timely reporting claims for General Liability Insurance and Professional Liability Insurance where both policies were issued by the same carrier. Attorney Carol Keough - Coats Rose Yale Ryman Lee (713) 653-7372; REO vs. Zurich American Insurance Co., RN Jones Agency, Inc. & Sidney Brown Cause No. C-1739-01-CA (Severed cause).

September 2005 - Engaged to assist defense attorneys answering alleged Agent Errors & Omissions. A fireworks explosion and fire resulted in multiple fatalities and widespread property losses. Allegations involved coverage placement disputes for numerous lines of insurance: Commercial Auto, Workers Compensation, General Liability Insurance, Commercial Umbrella, and Property Insurance. Attorneys Brent Cooper and Joyce Ondich - Cooper & Scully, PC, (214) 712-9500. Joseph M. Lamb, Jr. d/b/a Pyrotechnics by Lamb v. Britton-Gallagher, et al; Civil Action No. 2-04CV-400, US District Court, Eastern District of Texas, Marshall Division.

July 2005 - Retained by Orix Capital Markets as their Property Insurance Expert. Litigation involves mortgage document(s) insurance language requiring borrower(s) to maintain Terrorism Insurance for mortgaged properties post 9-11-01. Attorney Talmage Boston - Winstead Sechrest & Minick, PC (214) 745-5462; Attorney Amy Howell (214) 237-2000. ECF North Ridge v. ORIX Capital Markets; Cause No. 04-7956-G, 134th Judicial District Court Dallas County, Texas.

March 2005 - Engaged by plaintiff counsel to research coverage availability regarding both Inland Marine and Ocean Marine Insurance after extensive damage to machinery in transit. Parties included the machinery manufacturer as well as multiple cargo transfer agents and common carriers. Attorney Hugh Connor - Kelly Hart & Hallman, LLP, (817) 332-2500. Anchor Fabrication L.L.P. vs. Southwest Freight, Inc., et al; Cause No. 236-204366-04; 236th Judicial District, Tarrant County, Texas

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Burl Daniel, CPCU, CIC, CRM     |     817.980.4897    |     burl@burldaniel.com