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US exposure
Surplus lines insurance is cover for a US risk written by an insurer that is not licensed (non-admitted) in that state, placed through a licensed surplus lines broker. It matters because how a US entity’s cover is placed decides which state’s rules and taxes apply.
Part of: Public liability with US jurisdiction
In short
In the US, admitted insurers are licensed in a state; non-admitted insurers are not, and write surplus lines business for risks the admitted market will not take. Since 21 July 2011, the Nonadmitted and Reinsurance Reform Act has made placements subject solely to the insured’s home state, usually its principal place of business, and only that state can levy the premium tax. Lloyd’s describes itself as one of the largest US surplus lines insurers. A UK parent selling into the US is usually covered by its UK policy with US jurisdiction; a US subsidiary normally needs cover placed for its own home state.
Last reviewed 7 October 2026 by the Apex commercial team.
Every US state licenses insurers to write business within its borders. A licensed insurer is admitted in that state. An insurer without a licence there is non-admitted. Surplus lines insurance is cover written by non-admitted insurers, placed through a licensed surplus lines broker.
The NAIC, the body of US state insurance regulators, describes the surplus lines market as “a unique segment of the property & casualty industry consisting of non-admitted specialized insurers covering risks not available within the admitted market”. Its glossary defines a surplus line as specialised property or liability cover available through non-admitted insurers “where coverage is not available through an admitted insurer”.
In practice, surplus lines carriers take risks that admitted insurers will not write on their standard filed forms: unusual operations, high hazards, new technology, or risks without enough loss history to price in the usual way. The NAIC reports that the US surplus lines market wrote $131 billion of direct premium in 2024, about 12% of the US property and casualty market.
The Nonadmitted and Reinsurance Reform Act of 2010 (NRRA), enacted on 21 July 2010 as part of Public Law 111-203 and effective from 21 July 2011, makes one state the regulator of each surplus lines placement, even where the risks are spread across several states. Its key provisions are now in Title 15 of the US Code:
| Provision | What it says |
|---|---|
| 15 U.S.C. § 8202(a) | The placement of non-admitted insurance is subject to the statutory and regulatory requirements “solely of the insured’s home State”. |
| 15 U.S.C. § 8201(a) | “No State other than the home State of an insured may require any premium tax payment for nonadmitted insurance.” |
| 15 U.S.C. § 8206 | The home state is where the insured has its principal place of business (for an individual, principal residence). If all of the risk is outside that state, it is the state with the greatest share of the taxable premium. |
| 15 U.S.C. § 8204 | States may not stop a surplus lines broker placing cover with an insurer domiciled outside the US that is on the NAIC’s Quarterly Listing of Alien Insurers. |
The NAIC adds that licensed surplus lines brokers must check that the insurer meets state eligibility criteria and pay surplus lines premium tax to the home state. One consumer difference matters: state guaranty fund protection, available in the admitted market, is “not available to the surplus lines market”.
Lloyd’s describes itself as “one of the largest surplus lines insurers in the US” and a significant provider of reinsurance capacity there. Under the NAIC framework, non-US insurers and Lloyd’s syndicates admitted to the Quarterly Listing of Alien Insurers are supervised by the NAIC International Insurers Department and its Surplus Lines (C) Working Group.
That is why a US business with an unusual risk often ends up with a policy underwritten at Lloyd’s, placed by a US surplus lines broker. It is also why “written at Lloyd’s” and “compliant for a US insured” are not the same question. The second depends on how the policy was placed for that insured’s home state.
For a UK group with US activity, the question is usually who the insured is and where it is based. The table shows the usual pattern. It is general information, not regulatory advice; the rules that apply are those of the relevant US state.
| Situation | How cover is commonly arranged | What to watch |
|---|---|---|
| UK company selling or exporting to US customers, no US entity | A UK policy for the UK company, with a jurisdiction clause that includes US claims | US and Canada exclusions or sub-limits; how defence costs sit against the limit |
| UK staff visiting the US for meetings or short projects | Usually the UK company’s own policies, extended for temporary visits | Territorial wording on temporary visits; whether US-based work is included |
| US subsidiary with its principal place of business in a US state | Local US cover for the subsidiary, from an admitted insurer or through a surplus lines broker in its home state | Whether a UK policy naming the US entity meets that state’s requirements; local certificates and endorsements US clients ask for |
| Group with both | Often a UK master policy for the parent, with local US policies underneath and a difference-in-conditions or limits layer from the master | Gaps between the local and master wordings; who pays the surplus lines tax |
Our guide to insurance when expanding overseas covers the wider question of local versus master cover.
See also public liability with US jurisdiction.
If this affects your business, these are the points a broker will ask about:
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Cover for UK groups with US activity, placed by a named broker
Send us your current schedule, or tell us about the property if you are arranging cover for the first time. Or leave your number and a named broker will call you back, usually the same working day.
Apex Insurance Brokers is an independent insurance broker based in Bristol, established in 2009 and authorised and regulated by the Financial Conduct Authority. We are not tied to one insurer: we work with over 30 markets, including Lloyd’s syndicates through wholesale brokers, and every client has a named broker who handles the placement, mid-term changes, certificates for clients and the renewal.
An admitted insurer is licensed to do business in a state. A non-admitted insurer is not licensed there, but may still write cover through a licensed surplus lines broker, usually for risks admitted insurers will not take. One key difference for buyers is that state guaranty fund protection does not apply to surplus lines policies.
Under the Nonadmitted and Reinsurance Reform Act of 2010, placing non-admitted insurance is subject solely to the insured’s home state rules, and only that state can require premium tax. The home state is usually where the insured has its principal place of business, or for an individual, their principal residence.
Lloyd’s describes itself as one of the largest surplus lines insurers in the US. Lloyd’s syndicates on the NAIC Quarterly Listing of Alien Insurers are supervised through the NAIC International Insurers Department, and federal law stops states preventing surplus lines brokers placing cover with listed alien insurers.
Sometimes it names the subsidiary, but that does not settle whether the cover is compliant for a US-based insured. A US subsidiary’s home state rules usually govern its insurance. Many groups use local US policies for the subsidiary under a UK master policy. Take US regulatory advice on your structure.
Not necessarily. The NAIC notes that surplus lines insurers have historically low insolvency rates. The main difference is that state guaranty funds, which protect policyholders of admitted insurers if an insurer fails, are not available for surplus lines policies.
Apex arranges cover for UK parent companies with US sales and operations, working with US brokers where a local policy is needed. Tell us how your group is set up. Or call 0117 325 0027.
Start your quote Call 0117 325 0027Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales, company number 07014570. This page is general information, not advice on your individual circumstances. Cover is always subject to the insurer’s acceptance and the policy terms, and this page does not guarantee that cover will be available or on what terms.
