What is surplus lines insurance primarily designed to address?

Surplus lines insurance is specifically designed to cover unique or higher-risk situations that standard insurance policies typically do not accommodate. This type of insurance is essential for individuals or businesses that may require coverage for specific risks that are deemed too challenging or unconventional for traditional insurance markets to underwrite.

For example, surplus lines might be utilized for coverage in areas such as aviation, high-value art collections, or specialized professional services, where the risk factors cannot be properly assessed or standardized by conventional insurers. In these cases, surplus lines provide a vital alternative for those who are unable to secure adequate coverage through standard insurance channels, allowing them to transfer their risk and protect their interests more effectively.

This is why the focus of surplus lines is on addressing niche markets and higher-risk scenarios rather than general or standard insurance needs, which are usually covered adequately by the regular markets.