Which type of businesses might require surplus lines insurance?

Surplus lines insurance is specifically designed to cover high-risk businesses that cannot obtain coverage through the standard insurance market due to their unique or significant risk factors. These businesses may include those involved in industries with higher liability exposure, unusual operational hazards, or where traditional insurers have limited appetite. For instance, businesses in sectors like construction, aviation, or certain types of manufacturing might find that conventional insurance policies are inadequate for their needs, leading them to seek coverage through surplus lines.

While large corporations, non-profit organizations, and local governments could theoretically be categorized based on specific circumstances, it is the high-risk businesses that predominantly seek surplus lines. These industries often face challenges in securing affordable and comprehensive coverage, making surplus lines an essential alternative. As such, the identification of high-risk businesses as the primary candidates for surplus lines insurance illustrates the purpose and necessity of this type of coverage in the insurance marketplace.