What do surplus lines insurance policies typically specify regarding limits?

Surplus lines insurance policies are designed to cover risks that standard insurance markets may not be willing to insure due to their unique or high-risk nature. One of the key features of these policies is that they often specify specific limits of liability that can vary significantly from what is typically found in standard insurance policies. This flexibility allows insurers to tailor coverage to the specific needs and risk levels of the insured, which is crucial for nonstandard or specialized risks.

Unlike standard market policies, which usually have set limits and underwriting guidelines, surplus lines allow for negotiation and customization. As a result, the limits can be higher or lower depending on the specific circumstances and agreement between the insurer and the insured. This adaptability makes surplus lines a vital option for businesses or individuals facing unique exposures that cannot be adequately covered by standard insurance products.