Excess & Surplus (E&S) Market

The excess and surplus lines market exists for risks that standard carriers will not touch — and tree service companies frequently end up here. If your operation has a high EMR, a history of significant claims, works near power lines, performs crane-assisted removals, or operates in a catastrophe-prone state, standard admitted carriers may decline your application. E&S carriers step in to provide coverage where the admitted market will not.

E&S carriers are not "admitted" in the state where you operate, which means they are not regulated by the state insurance department in the same way and are not backed by the state guaranty fund if the carrier becomes insolvent. However, they are still regulated — each state has a surplus lines stamping office that oversees these placements. Your agent must be licensed as a surplus lines broker to place coverage in the E&S market.

The tradeoff is cost and flexibility. E&S premiums are typically 20-50% higher than comparable admitted-market coverage. Policy forms may be more restrictive, with broader exclusions or higher deductibles. On the other hand, E&S carriers can customize policy terms more freely because they are not bound by state-filed rate and form requirements.

For tree service companies, the E&S market is often a temporary home. If you land here because of a bad loss year, focus on improving your safety record and EMR. After two to three clean years, a good agent can often move you back to the admitted market where premiums are lower and coverage terms are more favorable.