What does a "bind order" indicate in surplus lines insurance?

A "bind order" in surplus lines insurance serves as an instruction to secure coverage for a specific risk. This term is critical in the context of surplus lines because it conveys a commitment from the broker or agent to obtain insurance for the insured immediately. When a bind order is issued, it allows the insurer to proceed with underwriting and providing coverage, ensuring that the insured is protected against potential losses from the time the order is placed.

In surplus lines, where coverage is often sought for unique or high-risk situations that standard market insurers may not accommodate, the bind order becomes an essential tool. It effectively communicates the urgency and necessity for coverage, allowing the insurer to take on the risk based on the defined terms. The process typically involves the broker or agent working closely with the insurer to finalize the terms of the coverage, ensuring the insured's needs are met.