What does surplus lines insurance refer to?

Surplus lines insurance refers to coverage that is not available through the standard market. This means it is utilized when a particular type of risk cannot be obtained from licensed or admitted insurers. Surplus lines insurers are typically non-admitted, allowing them greater flexibility in underwriting unique or high-risk exposures that traditional insurance companies may not be willing to cover.

In the context of the question, knowing that surplus lines are crucial for businesses or individuals who face risks that standard insurance providers cannot address helps underscores their importance in the insurance landscape. This can include specialized industries or unique circumstances that may fall outside typical underwriting guidelines, hence requiring the surplus lines market.