Who is typically liable for the payment of the surplus lines tax?

The insured purchasing the policy is typically liable for the payment of the surplus lines tax. In surplus lines insurance, the tax is often imposed on the premium paid by the insured for coverage that is placed through a surplus lines broker. This means that while brokers facilitate the placement of the insurance and may assist in the remittance of the tax, the ultimate responsibility for payment lies with the insured.

In many jurisdictions, surplus lines taxes are designed to ensure that insureds contribute to state funds that support regulatory processes and infrastructure within the insurance market. Therefore, the insured is the primary entity accountable for ensuring that the tax is paid as part of the overall cost of obtaining surplus lines coverage.