What type of coverage is typically associated with surplus lines insurance?

Surplus lines insurance is primarily designed for high-risk coverage that is often not obtainable from standard admitted carriers. Admitted carriers are those that are licensed by the state and subject to strict regulatory requirements, which typically means they can only provide coverage for risks that they can adequately insure under those regulations. In contrast, surplus lines insurers are not subject to the same regulations and can offer policies for unique or high-risk situations that traditional insurers might avoid, such as certain types of liability, unusual property risks, or specialized business needs.

This flexibility allows surplus lines insurers to cater to industries or businesses that present higher risks, which admitted carriers may deem too risky for regular coverage. Consequently, when agents seek out surplus lines insurance, it is often because they require coverage for unconventional or elevated risk scenarios. This makes the association with high-risk coverage the defining characteristic of surplus lines insurance.