What is often the first step for agents before engaging in surplus lines transactions?

The first step for agents before engaging in surplus lines transactions is ensuring they meet state licensing requirements. This is critical because surplus lines insurance is a specialized type of coverage available when standard lines of insurance cannot meet a client’s needs. Each state has specific regulations governing surplus lines transactions, including particular licensing requirements for agents. Without proper licensing, an agent cannot legally place surplus lines insurance, which could lead to legal complications or the inability to provide coverage for clients.

Additionally, understanding and complying with these requirements ensures that agents can operate effectively within the regulatory framework of their state, offering protection to both themselves and their clients. This foundational step establishes credibility and licensure before moving forward with market analysis, client engagement, or marketing strategies.