What is a Service of Suit or Service of Process clause, and why do I need it?
Ever see any of those old TV shows about police, detectives or attorneys? There was always some guy jumping out a back window and down a fire escape trying to avoid being “served” legal documents (“process” refers to these legal documents, typically a summons or complaint with regard to a lawsuit).
That’s because for any lawsuit to proceed, the legal documents relating to the lawsuit must be delivered to, or “served” upon, the defendant so that the court has some certainty that the defendant knows that they are being sued. The surplus line law recognizes that, in the case of an Illinois insured trying to sue their surplus line insurer, this could entail great expense or delay since the insurer could be located anywhere in the world.
Therefore, the law requires that any policy, where the insured’s home state is Illinois, include a provision appointing the Director of the Illinois Department of Insurance as an attorney of the insurer. The provision must authorize the Director to accept this “service of process” on behalf of the insurer.
The wording in the policy that makes these appointments is called the “Service of Process” or “Service of Suit” clause or endorsement and the law requires that all surplus line policies on Illinois risks include this wording. For more about the service of suit requirement, click here. To read the laws and regulations that contain this requirement, see paragraph 10 of the Illinois Surplus Line Law and Illinois Regulation 2701.110.