Why might an insured choose surplus lines insurance?

An insured might choose surplus lines insurance primarily to obtain coverage for high-risk exposures or niche products. Surplus lines insurance is specifically designed for situations where traditional insurance markets are unable or unwilling to provide coverage due to the elevated risk associated with the insured's needs. This could include specialized operations, unconventional businesses, or activities considered too risky for standard insurers.

For instance, an individual or business engaging in activities such as extreme sports, certain types of manufacturing, or unique forms of liability might not find conventional insurance policies that adequately cover their specific circumstances. Surplus lines insurers offer innovative products and flexibility that can address these unique risks, allowing insureds to have tailored coverage that standard market policies do not offer.

This capability to cover high-risk profiles is the defining characteristic of surplus lines insurance, making it a vital option for those requiring specialized protection that is not available in the mainstream market.