For what purpose can excess and surplus lines insurance be written?

Excess and surplus lines insurance is specifically designed to provide coverage for risks that are not typically accepted by standard insurers. When established insurers decline to cover certain risks due to their unique, high-risk, or unusual nature, surplus lines insurance comes into play as an alternative.

This form of insurance allows brokers to access coverage from non-admitted insurers, which are not licensed in the state but can write insurance on risks that cannot be placed with admitted carriers. This promotes flexibility in the insurance market, ensuring that businesses or individuals can still find coverage, even for non-standard or high-risk situations that might otherwise remain uninsurable.

In contrast, the other options touch on aspects that do not fully encompass the purpose of excess and surplus lines insurance. Better pricing isn't the primary reason for using surplus lines; it is more about accessibility to coverage. Compliance with federal regulations typically revolves around adherence to state-specific rules rather than being a direct purpose for surplus lines. Lastly, while surplus lines can cover many types of risks, it is not accurate to state that it can be used for all types, as regulatory and risk criteria still apply to its use.