Surplus Lines companies were formed to give clients with unique risks and/or poor loss history a chance to secure malpractice insurance and other insurance that could not be obtained through a standard, admitted dentist malpractice insurance company. The risk may either be too big, too complex, or too risky for the standard dental malpractice insurance carriers to accept according to their internal guidelines.
Excess and Surplus Lines companies operating in Florida are not domiciled in the state. They are domiciled elsewhere and regulated by the laws of that state. They are not unable to obtain a license in Florida — they choose not to do so. For this reason, excess and surplus lines companies are not licensed and regulated by the State of Florida. Often, they enter the state through a wholesale broker or managing general agent, who act like the underwriting department at an admitted insurance company. Generally, a dental malpractice insurance policy can be written in the excess and surplus lines market only after it has been declined by 3 standard carriers.
Excess and Surplus Lines insurance companies have great flexibility in determining dental malpractice policy forms and rates. This is because they are not governed by the dental malpractice rates and forms of the State of Florida. They basically serve the role of providing a malpractice insurance market for those dental clients who cannot secure dental malpractice insurance in the standard market. This generally means that dental risks written through the surplus lines market are written at a rate that is high enough to justify the risk. The coverage is usually more limited, without the “bells and whistles” of a standard dental malpractice insurance policy. Often, exclusions are added to make the risk more acceptable.