What should policies indicate regarding their surplus lines nature to inform the insured?

Policies issued by surplus lines insurers must clearly state that they are from a surplus lines insurer. This requirement is in place to ensure that the insured is fully informed about the nature of the coverage they are purchasing. Surplus lines insurers often operate outside the traditional state regulation of admitted insurers, and the clarity about the insurer's status allows policyholders to make informed decisions regarding their insurance coverage.

By clearly indicating that the policy is from a surplus lines insurer, the policy communicates important details about the coverage, which may include potential differences in regulatory protections, claims processes, and the financial stability associated with surplus lines insurers compared to admitted carriers. This transparency helps insureds understand their rights, the standing of the insurer, and any potential risks they need to be aware of when choosing this type of coverage.