Obtainment of commercial lines insurance is facilitated by a broker holding a surplus lines license. Commercial lines brokerage firms are necessary to connect out-of-state providers with special needs industries seeking coverage for high risk enterprise or products. Certain state laws can encumber high liability industries in their search for insurance coverage by destroying provider profit margins through potentially prohibitive licensees. Flexibility of coverage that can extend to riskier liabilities is often dependent on the extent of the carrier license process and the particular terms that vary from state to state.

High risk industries include those that deal in volatile materials, chemicals, bio hazards, explosives, or flammable items. Businesses involving high risk occupational hazards may also benefit from wholesale commercial lines insurance provided by a brokerage firm.

Admitted carriers are licensed in their state of operation to provide insurance to businesses and people. A commercial lines brokerage firm is aware of all the admitted carriers in a particular state and their offerings as well as those of surrounding states. Through a surplus lines license, these brokerages can provide out-of-state plans from carriers admitted in a surrounding state to commercial entities in the purchasing state. This type of insurance is referred to as wholesale lines insurance or surplus insurance and is often the answer for businesses that can’t find insurance in their state of operation.