What is a "surplus lines insurance"?

Surplus lines insurance refers specifically to coverage provided by non-admitted insurers, which are insurance companies that are not licensed or regulated by the state in which they offer their policies. This type of insurance is utilized for unique or high-risk situations that standard admitted insurers are unable or unwilling to cover. These could include specialized businesses, certain types of properties, or unusual personal risks that fall outside the typical underwriting criteria of more traditional insurers.

By using surplus lines insurance, policyholders can gain access to necessary coverage for risks that would otherwise remain uninsured, thereby enhancing their overall risk management strategy. The nature of surplus lines also emphasizes flexibility and innovation in terms of policy structures and coverage limits, reflecting the diverse needs of those seeking insurance for non-standard risks.