What does 'surplus lines insurance' refer to?

Surplus lines insurance refers to coverage that is provided by non-admitted insurers. These insurers do not have a license to operate in the particular state or region where the insurance is being issued. This type of insurance is typically used for high-risk policies or unique coverage situations that standard carriers are unwilling to insure.

The function of surplus lines insurance allows brokers to secure coverage for risks that may be too unusual or too significant for the traditional insurance markets. This can include what are considered high-risk industries or specific large-scale projects that fall outside the standard underwriting guidelines.

By working with these non-admitted insurers, clients can find coverage options for their needs that might otherwise be unavailable. This flexibility is essential in the insurance marketplace, especially for businesses or individuals with unique risk profiles.