What is a key reason for the existence of the surplus lines market?

The existence of the surplus lines market primarily addresses gaps in coverage offered by standard insurers. Surplus lines insurance serves as a solution for risks that are either too unique, high-risk, or difficult for conventional carriers to underwrite. When standard insurers cannot meet the insurance needs of certain clients, often due to the unusual nature of their risks, the surplus lines market steps in to provide coverage.

This is particularly crucial for industries or individuals that require specialized coverage that mainstream insurers either do not offer or are unwilling to insure because of the potential for high losses or unusual circumstances. Examples include niche businesses, specific types of property, or emerging risks like cyber liability. The surplus lines market allows producers to access these necessary coverages, ensuring that businesses and individuals can find insurance for their unique situations.