What is "loss history" in the context of surplus lines insurance?

In the context of surplus lines insurance, "loss history" refers to a record of claims an insured has filed in the past. This information is crucial for insurers when assessing the risk associated with providing coverage to a potential client. Insurers use loss history to evaluate the frequency and severity of previous claims, which helps them determine premium rates and whether to offer coverage in the first place.

An insured's loss history provides insight into their risk management practices and can indicate whether they are a higher risk based on their past claims behavior. This is especially relevant in surplus lines insurance, which often deals with higher-risk scenarios where traditional markets might not provide coverage. Thus, understanding the loss history helps underwriters make informed decisions tailored to the specific risk profile of the insured.