What is one condition under which a risk is eligible for surplus lines coverage?

A risk is eligible for surplus lines coverage when it cannot obtain coverage from an admitted insurer. This situation arises when admitted insurers either do not have the capacity, or their rates are insufficiently competitive to meet the needs of the insured. Surplus lines insurers operate outside of state regulations and provide coverage for risks that traditional insurance markets either cannot or will not insure. In essence, surplus lines serve as a solution for unique or high-risk situations not adequately addressed by admitted insurers.

The other conditions highlighted in the options do not accurately reflect the requirements for surplus lines coverage. For instance, a risk being insurable by multiple admitted insurers would typically disqualify it from surplus lines, as it suggests standard coverage is available. The need for immediate coverage is irrelevant to surplus lines eligibility; the key factor is whether admitted options exist. Finally, pre-approval by the state is not a requirement for a risk to qualify for surplus lines coverage; rather, surplus lines insurers must be licensed and cover risks that are beyond the scope of admitted markets.