Why might an insured seek surplus lines insurance?

An insured might seek surplus lines insurance primarily when traditional insurers refuse coverage due to high-risk factors. Surplus lines insurance is designed to fill the gaps left by standard insurance providers, particularly for individuals or businesses that present unique risks that are not accepted in the conventional market. This could include various high-risk industries or activities that traditional insurers may deem too risky or unprofitable to insure.

Surplus lines insurers operate outside the standard regulatory framework, allowing them more flexibility in underwriting and pricing. This means they can offer coverage for risks that fall outside the norms, providing an essential safety net for those unable to secure coverage through traditional means. Therefore, when insured individuals or businesses find themselves in situations that are not addressed by the standard market, surplus lines insurance becomes an appealing option to obtain necessary protection.